Inflation reflects how prices of goods and services in the economy are changing. One measure of inflation is the consumer price index (CPI), which is the common headline number reported in the media.

The numbers for the CPI are released monthly, so it can be hard to tell what the CPI is doing on a daily or weekly basis. But what if there were prices you could observe directly that would serve as a closely related proxy for the CPI?

The FRED graph above shows that the CPI for all items and the CPI for sugar and sweets move similarly. Another way to say this is that these two price indices are highly correlated. Since 1947 the correlation is 0.99, and since the middle of 2020 the correlation is 0.97. Having a positive correlation that’s this close to 1 means that, as the CPI for sugar and sweets increases, so does the CPI for all items.

So, are price changes for sugary treats an indication of price changes overall? Well, this correlation between the two indices might be spurious. As an earlier FRED Blog post described it, “because time series can exhibit a common trend, it becomes difficult to interpret whether there is a relationship between them beyond that common trend.”

One way to investigate potential spurious correlation is to see if there is also a correlation in the growth rates of the two variables. We do this in our second graph by plotting the growth rate from the month prior for both price indices.

The correlation between the growth rates is 0.97 since 2020, which suggests this correlation is sound and not spurious. So, you could track the prices of candy or cookies on a daily or weekly basis at the grocery store to gauge what’s going on with the CPI for all items.

How these graphs were created: First graph: Search FRED for and select the “CPI for All items” series. In the “Edit Graph” panel, use the “Add Line” tab to search for and select “CPI Sugar and Sweets.” To normalize the data, selecte the last option in the the “Units” dropdown menu: “Index (Scale value to 100 for chosen date)”; choose 1990-01-01 and click “Copy to All.” Display the graph since 1947-01-01, which is the common start of the two series. Second graph: From the first graph, choose Units “Percent Change,” click “Copy to All,” and display the graph since 2000-01-01.

Suggested by B. Ravikumar and Amy Smaldone.

In January 2024, overall CPI rose 0.3% on a seasonally adjusted basis—a slight uptick from its 0.2% rate in December. It’s still a slowdown year-over-year, but this increase came as an unwanted surprise to observers expecting to see inflation continue to moderate. What’s stopping the headline inflation rate from continuing its decline?

The answer, at least in January, was shelter inflation. For January 2024, the shelter index rose by 0.6% and contributed more than two-thirds of the total CPI increase. The above graph shows the year-over-year change in shelter prices over the past decade. It’s evident that the trajectory of shelter inflation has been different from the non-shelter components of CPI: “All items less shelter” inflation peaked in mid-2022 and has been declining since, but shelter inflation peaked about one year later in March 2023 and has been declining at a slower rate.

Why is this? Shelter costs have unique characteristics that distinguish them from other goods and services. The shelter component of CPI comprises rent, lodging away from home, and owners’ equivalent rent (OER).

Rents are sticky. They change only when leases renew or a tenant moves, so it may take some time for those prices to reflect market conditions. OER comes from the same housing survey and is an attempt to estimate what owner-occupied houses would rent for, based on surveying local renters. In addition, these measures are sampled less frequently than for other goods, precisely because they change so sluggishly. This results in CPI shelter data lagging current housing market conditions.

Researchers at the San Francisco Fed, among other places, have tried to incorporate real-time data to predict what will happen to CPI shelter measures. They find that pressure from shelter inflation could ease over the coming year.

How this graph was created: Search FRED for and select “Consumer Price Index for All Urban Consumers: All Items Less Shelter in U.S. City Average.” From the “Edit Graph” section, click “Add Line” and select “Consumer Price Index for All Urban Consumers: Shelter in U.S. City Average.” In the “Edit Line” section, set units to “Percent Change from Year Ago” for both graphs.

Suggested by Nathan Jefferson.