Relative importance of selected CPI components during the business cycle

Consumer spending behavior varies considerably depending on whether the economy is in an expansion, recession, or recovery period. Consumers may be more likely to purchase a new car during an economic expansion, for example, or less likely to go out to dinner during an economic downturn. The relative importance of the “food at home” component of the Consumer Price Index increased between December 2007, when the economy was expanding, and December 2011, when it was in recession. By December 2013, when the economy was slowly recovering, the relative importance of food at home declined slightly.