Our chart of the week highlights the growing impact of rising electricity demand on inflation, as measured by the Consumer Price Index (CPI). While the AI-driven data center boom hasn’t directly affected most households, its ripple effects are likely to show up in utility bills. As the chart illustrates, electricity inflation tracked closely with overall CPI for much of the past decade, but over the last five years, it has surged ahead. This acceleration reflects a sharp rise in demand driven by broader electrification and the growing energy needs of AI infrastructure. Traditional data centers have been around for years, but AI facilities consume far more power—a single AI search can require roughly 10 times the energy of a basic web search. If this trajectory persists, electricity could become a structural contributor to inflation, much like auto insurance has in recent years.