How Much Does Inflation Vary by Income? Depends on How It’s Measured


The brief’s key findings are:

  • Today’s high inflation rates raise the question of how inflation impacts households differently by income.
  • To explore this issue, the analysis combines data from the Consumer Price Index (CPI) and the Consumer Expenditure Survey.
  • The results show that low- and high-income households face roughly similar inflation rates for items included in the CPI.
  • However, the rich can afford to save more, so a sizable share of their income is not exposed to inflation today.
  • While they will eventually spend their savings, they will have years to rearrange their spending patterns.

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