Housing and Non-Housing CPI Components: The National Case Versus a Local Example

摘要

In this paper, we develop separate measures for the Bureau of Labor Statistics Consumer Price Index (CPI-U) for just the housing component and the headline rate without the housing component to reveal how housing impacted aggregate inflation over the 2002-2011 time period. The same analysis is conducted employing the Local Economic Indicator Project (LEIP) CPI for Jacksonville, Florida, for comparison. The results indicate that beyond what most would realize, the housing sector drove inflation higher in the middle of the last decade; however, non-housing inflation was substantially higher in both indicators subsequent to the beginning of the Great Recession. Structural break analysis is used to mitigate the non-stationarity in the time series and to identify the implications with and without the events that led to the breaks.