How Far Would $1 From 1999 Go Today?
Visualizing Consumer Price Index Data Across Eight Categories
Shri Khalpada
This interactive visualization explores how the value of the American dollar has changed from December 1999 to July 2023 across different categories. This visualization was developed using Chained Consumer Price Index data for U.S. City Averages from the U.S. Bureau of Labor Statistics (BLS).
Goal
The goal of this project is simply to make publicly accessible BLS data more digestible by representing it in an interactive visualization.
What's being visualized?
The visualized values represent the Chained Consumer Price Index.
The Consumer Price Index (CPI) is like a yardstick that helps us understand how much the cost of everyday things, like groceries or rent, has gone up or down over time.
The Chained CPI (C-CPI-U) is a more advanced version of CPI that takes into account how people might switch to different items when prices change, giving us a slightly more accurate picture of how inflation affects our spending.
The CPI, while being the most well-known indicator of inflation, is not comprehensive. It doesn't include things like the prices of stocks or homes, which are also important parts of the economy. You can read more extensively about the CPI and C-CPI-U methodology on the BLS's website.
Is this considered a high level of inflation?
Inflation in moderation is healthy. Very low inflation can trigger a cycle of dwindling inflation expectations, limiting interest rate reduction flexibility for job market stimulation. The Federal Reserve, who has set a target goal of 2% annual inflation, describes this phenomenon in greater detail here.
That being said, the BLS indicates that the C-CPI-U has increased 3.7% over a 12 month period leading up to October 2023. This is considerably high, particularly affecting the roughly 60% of Americans who are living paycheck to paycheck.
Why a stacked area chart?
Per the BLS, the eight categories represented in the visualization constitute all categories of consumer spending. The logic here was that the overall shape of the area chart would reflect overall change in the spending power of the dollar. Using $1 as the base value for each category avoids assumptions about how much people spend on each category, while still allowing the audience to think in terms of the eight categories.
The stacked area chart alone falls short in easy comparison between categories. To support this use case, additional sparklines and a color-coded table were added below the area chart.
Technical definitions
For more technical definitions, here are some relevant sections from the BLS's documentation:
The Consumer Price Index (CPI) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups (food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services).
The C-CPI-U employs a formula that reflects the effect of substitution that consumers make across item categories in response to changes in relative prices.
We hope you found this visualization interesting and appreciate all of your support for PerThirtySix! We love building visualizations that make it easier to understand complex things.
You can follow us on Twitter at @PerThirtySixers or author Shri Khalpada at @ShriKhalpada.
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