Inside the Consumer Price Index: January 2026

• Three categories—Medical Care, Housing, and Food & Beverage—have each increased over 100% since 2000, with food costs spiking significantly post-pandemic
• College tuition and fees have risen nearly 200% since 2000, while daycare and preschool costs have surged 160%, with accelerated growth starting in late 2022 after pandemic-era grants expired
• Energy costs (6.3% of total expenditures) are distributed across categories rather than tracked separately, and core inflation excludes food and energy but includes alcoholic beverages, creating disparate impacts on different household types

Summary: Inside the Consumer Price Index - January 2026

Key Components and Structure

The Bureau of Labor Statistics divides CPI-U into eight categories, with food, shelter, and clothing comprising over 60% of the index. Energy, though not a standalone category, represents 6.3% of total expenditures (2.9% transportation fuels, 3.4% household energy) and is distributed across Housing and Transportation.

Major Price Movements Since 2000

• Highest inflation: Medical Care, Housing, and Food & Beverage—all up over 100%
• Lowest inflation: Apparel—practically unchanged since 2000
• College Tuition: Up nearly 200%, weighted at 1.351% of total expenditures
• Daycare & Preschool: Up approximately 160%, with accelerated growth post-2022 due to expired pandemic grants and tight labor markets; weighted at just 0.699%
• Transportation shows high volatility driven primarily by motor fuel prices

Current Inflation Metrics (December 2025)

• Headline CPI: 2.39% annualized rate; 93.3% cumulative increase since 2000
• Core CPI (excluding food and energy): 2.50% annualized rate; 86.3% cumulative increase since 2000

Market Implications

Inflation impacts vary dramatically by household composition. Lower-income families, those on fixed incomes, and households with high expenses in tuition, daycare, transportation, or medical care face disproportionate burdens. Suburban commuters suffer more from energy price spikes than urban/remote workers. The article highlights that BLS methodology may overstate college tuition costs by using sticker prices rather than net costs after financial aid.

The Federal Reserve closely monitors Core Inflation for policy decisions, though consumers feel the cumulative impact of headline CPI more acutely in their purchasing power.