Inflation Brief: March 2026

The Reality Index rose 4.31% year over year in March 2026, running 105 basis points hotter than the BLS headline CPI print of 3.26%. Since 1980, the Reality Index has risen 4.73× against CPI's 4.01× — a cumulative gap of 18.0%.

The Reality Index — a fixed-weight measure of the prices American households actually pay across ten categories of everyday spending — rose 4.31% in March 2026 compared with March 2025. The BLS Consumer Price Index for All Urban Consumers (CPI-U), unadjusted, rose 3.26% over the same period. The Reality Index's 105-basis-point margin over the official measure was still its widest of the spring, before an energy surge began pulling the two closer in April and May.

What drove the print — category inflation, March 2026

Year-over-year change by category, with the Reality Index and official CPI all-items rates for reference

Reality Index all-items +4.31% vs official CPI +3.26% — still the widest spring gap. Transportation led on a divergence between used-vehicle transaction prices and the official index.

What drove the print

March was broad-based, but used-vehicle prices pushed transportation to the front of the index.

Health care carried its +5.56% year-over-year line from the KFF Employer Health Benefits Survey baseline — among the steepest-rising categories in the index.
Transportation rose 6.87% — the index's biggest mover — driven not by gasoline (still moderate in March, +18.9%) but by used vehicles, which ran +5.7% at Manheim auction even as the official used-car index fell. Utilities rose 5.04%.
Housing — the largest weight in the index — rose 4.26%, with the renter portion (Zillow ZORI) up 1.70%.
Dining out rose 3.78%, education 2.82%, discretionary spending 2.24%, pets 2.23%, and groceries a comparatively mild 1.90%.
Communications fell 2.20%, the lone category below its level of a decade ago.

Cumulative context

Since 1980, the Reality Index has risen 4.73× against CPI's 4.01×. As of March 2026 that is a cumulative gap of 18.0% — the widest of the three spring readings, as the official index had not yet absorbed the energy-led increases that would narrow the margin in April and May.

Methodology notes

Weights. The Reality Index holds fixed 1980 expenditure weights across all years — a Laspeyres basket. It measures the cost of the same basket over time rather than reweighting toward how spending has shifted.

Housing. The housing bucket is tenure-weighted (roughly 65% owner / 35% renter). The renter portion is refreshed via Zillow ZORI; because Zillow publishes ZORI later in the month than the CPI release, this edition uses the most recent available ZORI reading as the renter proxy. The owner side is carried forward from the 2025 annual baseline.

Health care. The health-care bucket reflects the KFF Employer Health Benefits Survey, published annually each fall, and is carried forward between releases.

Education. Education is priced at published (sticker) tuition. A net-of-financial-aid alternative is under consideration as a user-selectable scenario.

Transportation. Transportation is priced with a dedicated Reality Index composite: used vehicles at Manheim auction values and new vehicles at Kelley Blue Book transaction prices, gasoline at the BLS average pump price, and the remaining components from the matching CPI subindices. Vehicles are where the official index's hedonic quality adjustments make transaction prices diverge from CPI.