The Impact of COVID-19 on the US Consumer Price Index (CPI)

Abstract

This research investigates the profound impact of irregular commodity price changes during unusual circumstances, particularly focusing on the COVID-19 pandemic. The research stems from the recognition that global events have the potential to trigger irregular and drastic changes in commodity prices. This research holds significant implications for both consumers and policymakers in navigating the complexities of global crises. The research employs the Consumer Price Index (CPI) as a crucial indicator to chart drastic changes in consumer product prices from January 2019 to September 2023. To establish a baseline, CPI data from January 2010 to December 2018 is utilized, and an Autoregressive Integrated Moving Average (ARIMA) model is employed to forecast hypothetical CPI for the target period. The comparison between forecasted and observed CPI data reveals the vast influence of the COVID-19 pandemic on consumer prices. This research explores various subcategories of CPI, emphasizing sectors such as Food and Beverage, Transportation, Housing, and Medical Care. The research found that COVID-19 leads to delays and lagging effects in certain sectors reflecting the overall increase in consumer product prices. The Medical Care CPI also exhibited the most complexity, reflecting the immediate and direct impact of the pandemic on healthcare costs.