It’s backpack season, and many Americans are starting a new school year. A recent FRED Blog post covered the impact of seasonality. This post covers education-related data—specifically, the cost of books and supplies. The top graph shows the monthly changes in the price of educational books and supplies over the past ten years, using the consumer price index, which measures inflation by reporting the percent change over time, on average, of a variety of goods and services paid for by U.S. urban consumers. In the past decade, educational supply costs have tended to rise most significantly in August and January, coinciding with the beginning of academic semesters for most students.
Seasonal adjustment accounts for these variations by using data from previous years to smooth seasonal eccentricities. The graph above shows the difference between the raw and adjusted CPI indices, showing that level-differences have increased over the past several decades. However, the difference between indices may not show the whole story, as CPI is used to report inflation as a percent change. The next graph shows the difference in the monthly percent change in the price of books and supplies between the raw and adjusted data, showing that the seasonal difference in the monthly price change has actually decreased over time.
The seasonal changes, besides decreasing, have also scattered across the school year. In the early 1970s, prices consistently rose each October and remained fairly stable during the remaining months. In the next decade, spikes emerged at the beginning of the calendar year as well, presumably as consumers spent more on supplies for the second semester of the school year. In recent years, the autumn spike in prices has begun earlier, shifting from October to August and September, likely reflecting changing market strategies and school schedules.
The crucial question remains: When can I find the best deals on school supplies? You may not want to ask your parents for the answer. Older folks may advise against buying in October, based on their experiences of cost increases, and propose an August shopping trip instead. However, today’s students may want to make the most of the price decreases of the early summer and late fall, with back-to-school shopping trips in July and December.
How these graphs were created: For the first graph, search for “CPI US Books and Supplies” and select the not seasonally adjusted, monthly series. From the “Edit Graph” section, adjust the units to “Percent Change.” From the “Format” tab, change the graph type to “Bar.” Finally, adjust the graph to display data from the last 10 years using the “10Y” button in the top right corner of the graph page. For the second graph, search for the same series: “CPI US Books and Supplies,” not seasonally adjusted, monthly. From the “Edit Graph” section, add the seasonally adjusted data to line 1 by searching for “CPI US Books and Supplies adjusted” in the box below “Customize Data.” Click “Add.” In the formula tab, type “a-b” and click “Apply.” For the last graph, follow the steps for the previous graph, but change the units for both series to “Percent Change.” In the format tab, select “Bar” as the graph type.
Suggested by Maria Hyrc.
