Sectional Buckets · Stacked Compositions
Each chart below shows how a single category of household spending — food, energy, or housing — has changed as a share of total family income over time. The stacked colors show which items within each category drove the change. The dashed line shows what the category's share would be if everything inside it had grown at the official CPI rate.
How to read these charts. The y-axis is "share of household spending" (percent). Each colored layer is a single item's contribution to that bucket. If an item grew faster than CPI, its layer thickened over time. If it grew slower, its layer thinned. The dashed blue line is the CPI counterfactual: where the bucket's total share would have been if every item inside grew at the broad inflation rate.
The takeaway, in one sentence: housing has roughly doubled as a share of household spending since 1980, while food and energy have stayed flat or shrunk — exactly the squeeze families feel and CPI's headline number does not capture.
13 retail items · BLS Average Price Data + CPI subindexes · CES Relative Importance weights, December 2024
What this shows. Food at home accounts for less than 3% of total household spending in the CES basket — a small slice. Among our 13 items, eggs and ground beef are the only food items where the share has grown over time, reflecting their faster-than-CPI inflation. Chicken, coffee, bananas, milk, and pasta have all shrunk as shares, reflecting their cheaper-than-CPI trajectory. The bucket as a whole has been roughly flat at around 2.6-3.2% of household spending across 45 years — food is one of the categories CPI gets approximately right, in aggregate.
Gasoline + electricity · BLS Average Price Data + EIA Monthly Energy Review · CES weights
What this shows. Energy spending peaked around 1980 at nearly 7% of household budgets — the lingering shadow of the OPEC oil shock — and has steadily declined since. Both gasoline and electricity ran cooler than CPI over the long run, partly because real energy prices have actually fallen (cheap natural gas, scaled renewables, more efficient vehicles), and partly because households have substituted toward more efficient consumption. The bucket's share of household spending is roughly half what it was at 1980. The 2024 dip reflects only electricity data; gasoline EIA data ends at 2023.
Rent of primary residence + FHFA Home Price Index (substituted for BLS OER) · CES weights
What this shows. Housing is the story. The category's share of household spending has grown from approximately 20% in 1980 to over 33% in 2024 — and the FHFA-substituted home price component is the primary driver. This is the largest single inflation gap in the Reality Index basket. One important caveat: CES weights housing at 26.28% based on BLS Owners' Equivalent Rent (OER), which is an imputed rental cost, not a real house price. We substitute the FHFA House Price Index here because FHFA tracks what homes actually cost — but the absolute level shown is approximate because we are using a CES weight built on a different measurement. The trajectory direction (steep upward) is correct and large; the precise level should be read with that caveat in mind.