1 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

United States Inflation 

Experience across the Income Distribution

Bureau of Labor Statistics: 

Consumer Price Index

Joshua Klick and Anya Stockburger

Presentation for the Federal Committee on 

Statistical Methods

October 26, 2022
2 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

CPI Family of Indexes a.

CPI-U • Timely, Broad-Based

Chained CPI-U • Best measure of cost-of-living index

• Disaggregated by household 

characteristics CPI-W, R-CPI-E

• Disaggregated statistics by household 

income

R-CPI-Income & 

R-Chained CPI-Income 
3 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

CPI Family of Indexes b.

CPI-U • Timely, Broad-Based

Chained CPI-U • Best measure of cost-of-living index

• Disaggregated by household 

characteristics CPI-W, R-CPI-E

• Disaggregated statistics by household 

income

R-CPI-Income & 

R-Chained CPI-Income 
4 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

CPI Family of Indexes c.

CPI-U • Timely, Broad-Based

Chained CPI-U • Best measure of cost-of-living index

• Disaggregated by household 

characteristics CPI-W, R-CPI-E

• Disaggregated statistics by household 

income

R-CPI-Income & 

R-Chained CPI-Income 
5 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

CPI Family of Indexes d.

CPI-U • Timely, Broad-Based

Chained CPI-U • Best measure of cost-of-living index

• Disaggregated by household 

characteristics CPI-W, R-CPI-E

• Disaggregated statistics by household 

income

R-CPI-Income & 

R-Chained CPI-Income 
6 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Outline

1. Household income subpopulations:

A. Methodology

B. Demographics

C. Expenditures

D. Quality of elementary cell coverage

2. R-CPI-Income and R-Chained CPI-Income 

3. Analysis

4. Conclusion and next steps
7 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Household income subpopulations 

Methodology-1

 Baseline: Working Paper 537-

Unweighted ranking of income quartiles

Issue-weights not evenly distributed

 Improvements:

1. Household weighted ranking

2. Income equivalized - square root of family size

3. Weights smoothed
8 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Household income subpopulations 

Methodology-2a

2020 income & expenditures ($10,000s)

Equivalized 

Income:

Interview

Annual Average

Expenditures:

Integrated

0 20 40 60 80 100

0

Q1 Q2 Q3 Q4 Q5

34 44 53 66 95

0 19 33 50 80 +

Q1 Q2 Q3 Q4 Q5
9 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Household income subpopulations 

Methodology-2b

Equivalized 

Income:

Interview

Annual Average

Expenditures:

Integrated

0 20 40 60 80 100

0

Q1 Q2 Q3 Q4 Q5

34 44 53 66 95

0 19 33 50 80 +

Q1 Q2 Q3 Q4 Q5

2020 income & expenditures ($10,000s)
10 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Demographics 2020

0%

10%

20%

30%

40%

50%

60%

U Q1 Q2 Q3 Q4 Q5

Renter Not working Less than high school graduate
11 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Relative Importance 2019-2020

0% 5% 10% 15% 20% 25% 30%

Rent

Food at home

Motor fuel

Owner's equivalent rent

Vehicles and maintenance

Food away from home

Recreation

Q1 U Q5
12 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Elementary cell coverage as proportion missing

Biennial 2019-2020 Monthly average 2020

0%

10%

20%

30%

40%

50%

60%

70%

U Q1 Q2 Q3 Q4 Q5

Collected Smoothed

0%

10%

20%

30%

40%

50%

60%

70%

U Q1 Q2 Q3 Q4 Q5

Collected priced items Smoothed priced items
13 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

CPI-U & R-CPI-Income to August 2022

Growth Rate

CPI-U 2.47%

Q1 2.62%

Q2 2.57%

Q3 2.52%

Q4 2.45%

Q5 2.36%
14 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

C-CPI-U & R-C-CPI-Income to 2020

Growth Rate

C-CPI-U 1.65%

Q1 1.94%

Q2 1.79%

Q3 1.65%

Q4 1.62%

Q5 1.56%
15 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Analysis 1. 12 Month Change of CPI less C-CPI

-0.5%

-0.3%

-0.1%

0.1%

0.3%

0.5%

0.7%

200701 200901 201101 201301 201501 201701 201901

 U Q1 Q5
16 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Analysis 2. 12 month change CPI less C-CPI

2005-2020 Annual Growth Rate (%) 

U Q1 Q5 Q1 less Q5 N1 N5 N1 less N5

CPI 1.88 2.04 1.79 0.25 2.08 1.78 0.30

C-CPI 1.65 1.94 1.56 0.38 1.98 1.56 0.42

Substitution Bias 0.23 0.10 0.23 X 0.10 0.22 X
17 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Analysis 3. CPI 2019-2020 Weight Ratio (Q1:Q5) 

vs. price change

Rent of primary residence(HA)

Tobacco and smoking products(GA)

Pork(FD)

Poultry(FF)

Energy services(HF)

Beef and veal(FC)

Telephone services(ED)

Motor fuel(TB)

New and used motor vehicles(TA)

Lodging away from home(HB)

-10%

-5%

0%

5%

10%

15%

20%

25%

30%

0 1 2 3 4 5

U Price 

Change 

January 

2020-

December 

2021

Biennial 2019-2020 Share of Q1:Q5
18 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Analysis 4. 2021 Year over year change 

Q1 less Q5 CPI contribution & effects

All Items

U 4.70%

Q1 4.72%

Q5 4.43%

Q1 Less Q5 0.29%

∑ Q1 > Q5 1.2%

∑ Q1 < Q5 -0.9%

Top 10 

Items:

Q1>Q5

Q1<Q5

-5 0 5 10 15

Rent primary residence(HA01)

Gasoline (all types)(TB01)

Electricity(HF01)

Cigarettes(GA01)

Utility (piped) gas service(HF02)

Limited service meals/snacks(FV02)

Cable & satellite tv/radio(RA02)

Motor vehicle insurance(TE01)

Land-line telephone services(ED04)

Chicken(FF01)

Pet services including veterinary(RB02)

Living/dining/kitchen furniture(HJ02)

Child care & nursery school(EB03)

Domestic services(HP01)

Car and truck rental(TA04)

Full service meals and snacks(FV01)

Used cars and trucks(TA02)

Owners' rent primary residence(HC01)

Lodging away from home(HB02)

New vehicles(TA01)
19 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Conclusion and next steps

 R-CPI-Income and & R-Chained CPI-Income – as 

quintile subpopulations

 Income methods improved:

Household weighted ranking

Equivalized income

Weight smoothing comparable to production

 Request feedback before moving to BLS site as a 

research series. 
Contact Information

20 — U.S. BUREAU OF LABOR STATISTICS • bls.gov

Joshua Klick and Anya Stockburger

Division of Consumer Prices and Price Indexes

www.bls.gov/cpi/

klick.joshua@bls.gov; stockburger.anya@bls.gov