Rethinking inflation inequality: evidence from national accounts

Marina Gindelsky and Robert Martin

Macroeconomic Dynamics, 2026, vol. 30, -

Abstract: Do low-income households systematically face higher inflation than high-income households? Contrary to prevailing narratives based on the consumer price index (CPI), our analysis using personal consumption expenditure (PCE) price indices demonstrates that inflation inequality has been moderating. Using income-stratified PCE price indices consistent with national accounts, we find substantially smaller inflation gaps than CPI-based studies suggest. This convergence is driven by significant inflation in financial services, primarily impacting higher-income households. Recalculating real disposable personal income (DPI) growth using corresponding PCE price indices yields significantly flatter income growth gradients than previously found using the CPI.

Date: 2026
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