The Bureau of Labor Statistics (BLS) produces the Consumer Price Index (CPI) as a measure of price change faced by consumers. The CPI for All Urban Consumers (CPI-U) targets the inflation experience of urban consumers which covers over 90 percent of the total population of the United States. This broad-based coverage may not reflect the inflation experience of an individual household or groups of households. Increasingly, there is user demand for CPIs across the income distribution. Research indexes by equivalized income quintiles paint a fuller picture of inflation for users interested in the state of the economy.
Quintile (five) cohorts are based on equivalized income where the final before tax income is divided by the square root of household size. Also, household-weighted ranking distributes the sample weights relatively equally across quintiles. To mitigate the impact of sampling error of the Consumer Expenditure (CE) survey data, the BLS employs expenditure weight smoothing techniques described in the in the CPI Handbook of Methods to quintile cohorts.
In the authors’ March 2021 working paper, we outline numerous caveats and limitations with the current methodology to calculate subgroup indexes. Briefly, using the same areas, stores or rental units, items, and prices sampled for the urban population does not capture cohort-specific differences that may impact their inflation experience. These research indexes are a reweighted aggregation of elementary item indexes constructed for the CPI-U population, similar to methodology used for the CPI for urban wage earners and clerical workers (CPI-W), and for the research CPI for Americans 62 years of age and older (R-CPI-E).
These two research indexes are calculated outside of the official production system and are at greater risk of calculation errors than the official CPI indexes. Additionally, they differ from the official indexes in both scope and aggregation and may not have the same data quality as the official indexes we publish. Customers should be aware of the caveats and limitations of any of these products they consider using.
BLS plans for semiannual releases for January and July where the R-CPI-I will lag publication of the CPI-U 1 to 5 months, and the chained R-C-CPI-I will lag quarterly publication of the final C-CPI-U 2 to 5 months. Release of indexes may be delayed due to resource availability and other constraints.
Indexes are produced for the equivalized income quintile subpopulations. Monthly indexes are available from December 2005 for the R-CPI-I and R-C-CPI-I. Relative importance values for select aggregates are available for December 2022.
Additional information is available from the United Nations Economic Commission for Europe (UNECE) 2023 conference presentation and working paper, and the Federal Committee on Statistical Methodology 2022 Research and Policy Conference presentation.
Prior research is summarized in a working paper published in March 2021.
Last Modified Date: September 13, 2023