Calculating inflation rates for categories of goods and services in the CPI market basket (see page 673) can provide insight into inflation in different sectors of the economy. Go to the Web site of the Federal Reserve Bank of St. Louis (FRED) (research.stlouisfed.org/fred2/).
a. Find the most recent values and values from the same month in 2010 for the following four categories of the Consumer Price Index: (1) Food and Beverages (CPIFABSL), (2) Apparel (CPIAPPSL), (3) Transportation (CPITRNSL), and (4) Medical Care (CPIMEDSL). b. Using the data from part (a), calculate the inflation rate over the period from 2010 to the present period for each of the four CPI categories.
c. According to your calculations, which category experienced the least amount of inflation and which category experienced the most inflation?