What is the CRB index?

The CRB Index, originally created by the Commodity Research Bureau in 1957 and now maintained by Refinitiv, is one of the oldest and most widely followed broad commodity benchmarks. The current version, the Thomson Reuters/CoreCommodity CRB Index, tracks 19 commodities across four groups: energy (39% weight), agriculture (41%), industrial metals (13%), and precious metals (7%). Its composition and weighting have been revised several times since inception.

The index serves as a general barometer for commodity market conditions and, by extension, for global inflationary pressures. When the CRB index is rising, it typically signals that input costs for businesses are increasing across multiple categories, which eventually flows through to consumer prices. The CRB index surged from roughly 150 to 330 between mid-2020 and mid-2022, presaging the highest consumer inflation in four decades. Its subsequent decline through 2023 was an early signal that inflationary pressures were abating.

The energy-heavy weighting means crude oil and its derivatives exert significant influence on the overall index. This can be an advantage (energy prices are economically significant and highly correlated with broad inflationary trends) or a disadvantage (an oil-specific event like an OPEC production decision can dominate the index, masking signals from other commodity categories). Alternative indexes like the Bloomberg Commodity Index (BCOM) use production-weighted methodologies with more balanced sector exposure.

For macroeconomic analysis, the CRB index provides a real-time, market-based read on global supply and demand conditions. Rising commodity prices across categories signal strong global demand or supply constraints. Falling prices across the board suggest weakening demand, a potential recession signal. Divergence between commodity categories (for example, energy rising while industrial metals fall) provides nuanced information about which sectors of the global economy are expanding or contracting. The CRB index is often included in financial conditions indexes and can serve as a cross-check on GDP forecasts and inflation expectations.