Transmission of material in this release is embargoed until
8:30 a.m. (EST) Thursday, January 19, 2012 USDL-12-0061
Technical information: (202) 691-7000 Reed.Steve@bls.gov www.bls.gov/cpi
Media Contact: (202) 691-5902 PressOffice@bls.gov
Consumer Price Index - December 2011
The Consumer Price Index for All Urban Consumers (CPI-U) was
unchanged in December on a seasonally adjusted basis, the U.S. Bureau
of Labor Statistics reported today. Over the last 12 months, the all
items index increased 3.0 percent before seasonal adjustment.
Similar to last month, the energy index declined in December and
offset increases in other indexes. The gasoline index declined for
the third month in a row and the household energy index declined as
well. The food index rose in December, with the index for food at
home turning up after declining last month.
The index for all items less food and energy increased 0.1 percent in
December after rising 0.2 percent in November. The indexes for
shelter, recreation, medical care, and tobacco all posted increases,
while the indexes for used cars and trucks, new vehicles, and apparel
all declined.
The all items index has risen 3.0 percent over the last 12 months, a
decline from last month's 3.4 percent figure. Recent declines in the
energy index have brought its 12-month change down to 6.6 percent
from 19.3 percent in September. The 12-month change in the index for
all items less food and energy held at 2.2 percent, while the 12-
month change in the food index edged up from 4.6 percent to 4.7
percent.
Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city
average
Seasonally adjusted changes from
preceding month
Un-
adjusted
12-mos.
June July Aug. Sep. Oct. Nov. Dec. ended
2011 2011 2011 2011 2011 2011 2011 Dec.
2011
All items.................. -.2 .5 .4 .3 -.1 .0 .0 3.0
Food...................... .2 .4 .5 .4 .1 .1 .2 4.7
Food at home............. .2 .6 .6 .6 .1 -.1 .3 6.0
Food away from home (1).. .3 .2 .4 .2 .2 .3 .2 2.9
Energy.................... -4.4 2.8 1.2 2.0 -2.0 -1.6 -1.3 6.6
Energy commodities....... -6.3 4.3 1.6 2.7 -2.9 -2.1 -1.9 10.6
Gasoline (all types).... -6.8 4.7 1.9 2.9 -3.1 -2.4 -2.0 9.9
Fuel oil (1)............ -2.2 -1.7 -.4 -.7 -.5 2.7 -1.0 18.0
Energy services.......... -1.1 .4 .4 .7 -.4 -.7 -.3 .8
Electricity............. -1.6 .8 -.1 .7 .4 .4 -.2 2.2
Utility (piped) gas
service.............. .4 -1.2 2.2 .8 -3.0 -4.4 -.8 -3.7
All items less food and
energy................. .3 .2 .2 .1 .1 .2 .1 2.2
Commodities less food and
energy commodities.... .5 .3 .4 -.2 -.1 .1 -.2 2.2
New vehicles............ .6 .0 .0 .0 -.3 -.3 -.2 3.2
Used cars and trucks.... 1.6 .7 .9 -.6 -.6 -.1 -.9 4.0
Apparel................. 1.4 1.2 1.1 -1.1 .4 .6 -.1 4.6
Medical care commodities
(1).................. -.1 .0 .1 .2 .3 .2 .2 3.2
Services less energy
services.............. .1 .2 .2 .2 .2 .2 .3 2.3
Shelter................. .2 .3 .2 .1 .2 .2 .2 1.9
Transportation services -.3 -.1 .2 .5 .1 .1 .1 2.5
Medical care services... .3 .3 .3 .2 .5 .5 .4 3.6
1 Not seasonally adjusted.
Year in Review
The CPI rose 3.0 percent in 2011 after a 1.5 percent increase in
2010. This was the largest December-December increase since 2007.
The energy index increased 6.6 percent in 2011, a deceleration from
the 2010 increase of 7.7 percent. The gasoline index, which rose 13.8
percent in 2010, increased 9.9 percent in 2011. In contrast, the
household energy index accelerated in 2011, rising 1.8 percent after
a 0.8 percent increase in 2010. The fuel oil index rose 18.0 percent
and the electricity index increased 2.2 percent, although the index
for natural gas declined for the third straight year, falling 3.7
percent.
The index for food accelerated in 2011, rising 4.7 percent compared
to a 1.5 percent increase in 2010. The index for food at home rose
6.0 percent in 2011 compared to 1.7 percent in 2010. All six major
grocery store food group indexes rose in 2011, with increases ranging
from 2.3 percent (fruits and vegetables) to 8.1 percent (dairy and
related products). The index for food away from home rose 2.9 percent
in 2011 after increasing 1.3 percent in 2010.
The index for all items less food and energy also accelerated in
2011, increasing 2.2 percent after its historical low 2010 increase
of 0.8 percent. This was the largest increase since 2007. Several
indexes turned up in 2011. The apparel index rose 4.6 percent after a
1.1 percent decline the previous year. Similarly, the new vehicles
index rose 3.2 percent in 2011 after a slight decline in 2010. The
indexes for recreation and household furnishings and operations also
rose in 2011 after declining in 2010. A number of other indexes rose
more quickly in 2011 than in 2010. The shelter index accelerated
notably, advancing 1.9 percent in 2011 after rising only 0.4 percent
the previous year. The indexes for used cars and trucks, medical
care, education, and personal care also rose more quickly in 2011
than in 2010. In contrast, the indexes for tobacco and airline fare
posted smaller increases in 2011 than 2010.
Consumer Price Index Data for December 2011
Food
The food index rose 0.2 percent in December after a 0.1 percent
increase in November. The index for food at home, which fell 0.1
percent in November, rose 0.3 percent in December as four of the six
major grocery store food group indexes increased. The index for
meats, poultry, fish, and eggs rose the most, increasing 0.7 percent,
even though the index for eggs declined. Also rising in December were
the indexes for cereals and bakery products and for nonalcoholic
beverages, each increasing 0.3 percent, while the index for other
food at home rose 0.4 percent. In contrast, the fruits and vegetables
index decreased 0.5 percent in December as the fresh vegetables index
fell 1.4 percent, and the index for dairy and related products
declined 0.1 percent. The index for food away from home, which rose
0.3 percent in November, increased 0.2 percent in December.
Energy
The energy index declined for the third month in a row, falling 1.3
percent in December as all of its major component indexes declined.
The gasoline index, which fell 2.4 percent in November, declined 2.0
percent in December. (Before seasonal adjustment, gasoline prices
fell 4.0 percent in December.) The household energy index also
declined, falling 0.4 percent in December, the same decrease as
November. The index for fuel oil fell 1.0 percent, the natural gas
index declined 0.8 percent, and the electricity index decreased 0.2
percent.
All items less food and energy
The index for all items less food and energy increased 0.1 percent in
December after rising 0.2 percent in November. The shelter index rose
0.2 percent for the third month in a row. The rent index increased
0.3 percent and the index for owners' equivalent rent advanced 0.2
percent. The medical care index continued to rise significantly; its
0.4 percent increase in December was the third in a row of at least
that size. The medical care services index rose 0.4 percent with the
hospital services index up 0.5 percent. The recreation index
increased 0.4 percent in December and the indexes for tobacco,
household furnishings and operations, and airline fares posted
increases as well. In contrast, the index for used cars and trucks
declined for the fourth month in a row, falling 0.9 percent, while
the index for new vehicles fell 0.2 percent, its third consecutive
decline. The apparel index fell 0.1 percent in December after
increasing in seven of the last eight months. The index for personal
care, which rose 0.6 percent in November, was unchanged in December.
Not seasonally adjusted CPI measures
The Consumer Price Index for All Urban Consumers (CPI-U) increased
3.0 percent over the last 12 months to an index level of 225.672
(1982-84=100). For the month, the index declined 0.2 percent prior to
seasonal adjustment.
The Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) increased 3.2 percent over the last 12 months to an index
level of 222.166 (1982-84=100). For the month, the index declined
0.3 percent prior to seasonal adjustment.
The Chained Consumer Price Index for All Urban Consumers (C-CPI-U)
increased 2.8 percent over the last 12 months. For the month, the
index declined 0.3 percent on a not seasonally adjusted basis. Please
note that the indexes for the post-2009 period are subject to
revision.
The Consumer Price Index for January 2012 is scheduled to be released
on Friday, February 17, 2012, at 8:30 a.m. (EST).
Redesigning the Consumer Price Index (CPI) Press Release Tables
The format of the tables contained in the CPI News Release will
change beginning with the CPI News Release for March, 2012, which
will be issued on Friday, April 13, 2012. News Release tables are
currently available as part of the News Release pdf and html files,
and independently in html format. The new tables will also be
available in Excel format. In addition, the BLS will begin issuing
monthly companion Excel files, which will contain additional index
level and CPI-W information.
These tables were made available for public comment during October
2011. In response to the public comments, the BLS will issue Excel
files each month, as companions to the News Release. There will be
CPI-U and CPI-W files, and in addition to the data contained in the
News Release tables, the Excel files will contain index values.
Samples of the companion Excel files will be available with the
February CPI News Release in March 2012. Samples of the new CPI press
release tables are available now at http://www.bls.gov/cpi/mock-
ups.htm.
In August 2009, the Bureau of Labor Statistics (BLS) restructured the
text of the CPI press release to focus on the price movements of
three broad expenditure categories, namely Food, Energy, and All
items less food and energy. Table A within the CPI press release text
was also updated in August 2009 to reflect this new structure.
Before August 2009, the text of the CPI press release had focused on
eight CPI `major groups' (Food and beverages; Housing; Apparel;
Transportation; Medical care; Recreation; Education and
communication; and Other goods and services).
While the text of the CPI press release was restructured in 2009,
seven additional CPI press release tables continued to be published
using the eight major groups. BLS has redesigned these press release
tables, to reflect the focus on Food, Energy, and All items less food
and energy. Within these three broad categories, CPI item series will
be further divided into commodities and services. The CPI News
Release will contain these updated tables beginning with the March
2012 News Release, to be issued on Friday, April 13, 2012.
Beyond the redesign in the structure of the CPI press release tables,
several other improvements to these tables have been made.
The new Table 1 gives a summary of the index series which typically
contribute to changes in the Consumer Price Index for All Urban
Consumers (CPI-U).
The new Table 2 will show the full publication stub using the new
structure for the CPI-U, including 11 new items series that were
created to augment the redesign in the publication structure. Table 3
will show aggregate item series (e.g., Transportation) that do not
fall under the Food, Energy, and All items less food and energy
structure.
Table 4 will show the All items indexes at the local, regional, and
city-size class levels.
Table 5 will show the Chained Consumer Price Index for All Urban
Consumers (C-CPI-U), and presents a history of annual percentage
changes in the C-CPI-U compared to the CPI-U.
Table 6 will focus on 1-month seasonally adjusted changes in the CPI-
U, while table 7 will focus on 12-month not seasonally adjusted
changes. Tables 6 and 7 will present three additional pieces of data
to help users better interpret index changes. First, these tables
will show the `effect' each item has on the price change for All
items. For example, if the effect of food is 0.4, and the index for
All items increased 1.2 percent, it can be said that increases in
food prices accounted for 0.4 / 1.2, or 33.3 percent, of the increase
in overall prices for that period. Said another way, had food prices
been unchanged, the All items index only would have increased 0.8
percent (or 1.2 percent for All items, minus the 0.4 effect for
Food). Effects can be negative as well. For example, if the effect
of food was a negative 0.1, and the All items index rose 0.5 percent,
the All items index actually would have been 0.1 percent higher (or
0.6 percent) had food prices been unchanged.
Second, standard errors for percent changes will be shown on tables 6
and 7. Confidence intervals for statistics can be created using
standard errors; e.g., roughly 95% confidence intervals can be
constructed using two standard errors. For example, if an item
increased 3.7 percent, and its standard error was 0.6 percent, the
95% confidence interval for that price change can be said to be 3.7
percent plus or minus two standard errors, or 3.7 percent plus or
minus 1.2 percent.
Finally, each item series in tables 6 and 7 will show the last time
that item had a price change as large (or as small) as the percent
change published that period. For example, if bananas rose 3.7
percent, and that was its largest increase since November 2007, that
would be noted in the new tables.
In addition, most of the existing tables show the `relative
importance', or weight, of each item category as of the previous
December. The relative importance columns in the new tables will be
improved in that they will be updated monthly to reflect the change
in relative prices over time.
Finally, there will no longer be any press release tables that focus
on the Consumer Price Index for Urban Wage Earners and Clerical
Workers (CPI-W). That said, the CPI-W All items index level and
percent changes will still be noted in the text of the press release,
and a companion Excel file with CPI-W information will be available.
Expenditure Weight Update
Effective with the release of the January 2012 CPI on February 17,
2012, the Bureau of Labor Statistics
(BLS) will update the consumption expenditure weights in the Consumer
Price Index for All Urban Consumers (CPI-U) and Consumer Price Index
for Urban Wage Earners and Clerical Workers (CPI-W) to the 2009-10
period. The updated expenditure weights for these indexes will
replace the 2007-2008 weights that were introduced effective with the
January 2010 CPI release. As originally announced by BLS in December
1998, CPI expenditure weights will continue to be updated at two-year
intervals.
Facilities for Sensory Impaired
Information from this release will be made available to sensory
impaired individuals upon request. Voice phone: 202-691-5200,
Federal Relay Services: 1-800-877-8339.
Brief Explanation of the CPI
The Consumer Price Index (CPI) is a measure of the average change in
prices over time of goods and services purchased by households. The
Bureau of Labor Statistics publishes CPIs for two population groups:
(1) the CPI for Urban Wage Earners and Clerical Workers (CPI-W),
which covers households of wage earners and clerical workers that
comprise approximately 32 percent of the total population and (2) the
CPI for All Urban Consumers (CPI-U) and the Chained CPI for All Urban
Consumers (C-CPI-U), which cover approximately 87 percent of the
total population and include in addition to wage earners and clerical
worker households, groups such as professional, managerial, and
technical workers, the self-employed, short-term workers, the
unemployed, and retirees and others not in the labor force.
The CPIs are based on prices of food, clothing, shelter, and fuels,
transportation fares, charges for doctors' and dentists' services,
drugs, and other goods and services that people buy for day-to-day
living. Prices are collected each month in 87 urban areas across the
country from about 4,000 housing units and approximately 26,000
retail establishments-department stores, supermarkets, hospitals,
filling stations, and other types of stores and service
establishments. All taxes directly associated with the purchase and
use of items are included in the index. Prices of fuels and a few
other items are obtained every month in all 87 locations. Prices of
most other commodities and services are collected every month in the
three largest geographic areas and every other month in other areas.
Prices of most goods and services are obtained by personal visits or
telephone calls of the Bureau's trained representatives.
In calculating the index, price changes for the various items in each
location are averaged together with weights, which represent their
importance in the spending of the appropriate population group.
Local data are then combined to obtain a U.S. city average. For the
CPI-U and CPI-W separate indexes are also published by size of city,
by region of the country, for cross-classifications of regions and
population-size classes, and for 27 local areas. Area indexes do not
measure differences in the level of prices among cities; they only
measure the average change in prices for each area since the base
period. For the C-CPI-U data are issued only at the national level.
It is important to note that the CPI-U and CPI-W are considered final
when released, but the C-CPI-U is issued in preliminary form and
subject to two annual revisions.
The index measures price change from a designed reference date. For
the CPI-U and the CPI-W the reference base is 1982-84 equals 100.
The reference base for the C-CPI-U is December 1999 equals 100. An
increase of 16.5 percent from the reference base, for example, is
shown as 116.500. This change can also be expressed in dollars as
follows: the price of a base period market basket of goods and
services in the CPI has risen from $10 in 1982-84 to $11.65.
For further details visit the CPI home page on the Internet at
http://www.bls.gov/cpi/ or contact our CPI Information and Analysis
Section on (202) 691-7000.
Note on Sampling Error in the Consumer Price Index
The CPI is a statistical estimate that is subject to sampling error
because it is based upon a sample of retail prices and not the
complete universe of all prices. BLS calculates and publishes
estimates of the 1-month, 2-month, 6-month and 12-month percent
change standard errors annually, for the CPI-U. These standard error
estimates can be used to construct confidence intervals for
hypothesis testing. For example, the estimated standard error of the
1 month percent change is 0.03 percent for the U.S. All Items
Consumer Price Index. This means that if we repeatedly sample from
the universe of all retail prices using the same methodology, and
estimate a percentage change for each sample, then 95% of these
estimates would be within 0.06 percent of the 1 month percentage
change based on all retail prices. For example, for a 1-month change
of 0.2 percent in the All Items CPI for All Urban Consumers, we are
95 percent confident that the actual percent change based on all
retail prices would fall between 0.14 and 0.26 percent. For the
latest data, including information on how to use the estimates of
standard error, see "Variance Estimates for Price Changes in the
Consumer Price Index, January-December 2010". These data are
available on the CPI home page (http://www.bls.gov/cpi), or by using
the following link http://www.bls.gov/cpi/cpivar2010.pdf
Calculating Index Changes
Movements of the indexes from one month to another are usually
expressed as percent changes rather than changes in index points,
because index point changes are affected by the level of the index in
relation to its base period while percent changes are not. The
example below illustrates the computation of index point and percent
changes.
Percent changes for 3-month and 6-month periods are expressed as
annual rates and are computed according to the standard formula for
compound growth rates. These data indicate what the percent change
would be if the current rate were maintained for a 12-month period.
Index Point Change
CPI
202.416
Less previous index
201.800
Equals index point change
.616
Percent Change
Index point difference
.616
Divided by the previous index
201.800
Equals
0.003
Results multiplied by one hundred
0.003x100
Equals percent change
0.3
Regions Defined
The states in the four regions shown in Tables 3 and 6 are listed
below.
The Northeast--Connecticut, Maine, Massachusetts, New Hampshire, New
York, New Jersey, Pennsylvania, Rhode Island, and Vermont.
The Midwest--Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota,
Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.
The South--Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky,
Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South
Carolina, Tennessee, Texas, Virginia, West Virginia, and the District
of Columbia.
The West--Alaska, Arizona, California, Colorado, Hawaii, Idaho,
Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
A Note on Seasonally Adjusted and Unadjusted Data
Because price data are used for different purposes by different
groups, the Bureau of Labor Statistics publishes seasonally adjusted
as well as unadjusted changes each month.
For analyzing general price trends in the economy, seasonally
adjusted changes are usually preferred since they eliminate the
effect of changes that normally occur at the same time and in about
the same magnitude every year--such as price movements resulting from
changing climatic conditions, production cycles, model changeovers,
holidays, and sales.
The unadjusted data are of primary interest to consumers concerned
about the prices they actually pay. Unadjusted data also are used
extensively for escalation purposes. Many collective bargaining
contract agreements and pension plans, for example, tie compensation
changes to the Consumer Price Index before adjustment for seasonal
variation.
Seasonal factors used in computing the seasonally adjusted indexes
are derived by the X-12-ARIMA Seasonal Adjustment Method. Seasonally
adjusted indexes and seasonal factors are computed annually. Each
year, the last 5 years of seasonally adjusted data are revised. Data
from January 2006 through December 2010 were replaced in January
2011. Exceptions to the usual revision schedule were: the updated
seasonal data at the end of 1977 replaced data from 1967 through
1977; and, in January 2002, dependently seasonally adjusted series
were revised for January 1987-December 2001 as a result of a change
in the aggregation weights for dependently adjusted series. For
further information, please see "Aggregation of Dependently Adjusted
Seasonally Adjusted Series," in the October 2001 issue of the CPI
Detailed Report.
Effective with the publication of data from January 2006 through
December 2010 in January 2011, the Video and audio series and the
Information technology, hardware and services series were changed
from independently adjusted to dependently adjusted. This resulted
in an increase in the number of seasonal components used in deriving
seasonal movement of the All items and 54 other lower level
aggregations, from 73 for the publication of January 1998 through
December 2005 data to 82 for the publication of seasonally adjusted
data for January 2006 and later. Each year the seasonal status of
every series is reevaluated based upon certain statistical criteria.
If any of the 82 components change their seasonal adjustment status
from seasonally adjusted to not seasonally adjusted, not seasonally
adjusted data will be used in the aggregation of the dependent series
for the last 5 years, but the seasonally adjusted indexes before that
period will not be changed. Note: 37 of the 82 components are not
seasonally adjusted for 2011.
Seasonally adjusted data, including the all items index levels, are
subject to revision for up to five years after their original
release. For this reason, BLS advises against the use of these data
in escalation agreements.
Effective with the calculation of the seasonal factors for 1990, the
Bureau of Labor Statistics has used an enhanced seasonal adjustment
procedure called Intervention Analysis Seasonal Adjustment for some
CPI series. Intervention Analysis Seasonal Adjustment allows for
better estimates of seasonally adjusted data. Extreme values and/or
sharp movements which might distort the seasonal pattern are
estimated and removed from the data prior to calculation of seasonal
factors. Beginning with the calculation of seasonal factors for
1996, X-12-ARIMA software was used for Intervention Analysis Seasonal
Adjustment.
For the seasonal factors introduced in January 2011, BLS adjusted 29
series using Intervention Analysis Seasonal Adjustment, including
selected food and beverage items, motor fuels, electricity and
vehicles. For example, this procedure was used for the Motor fuel
series to offset the effects of events such as damage to oil
refineries from Hurricane Katrina.
For a complete list of Intervention Analysis Seasonal Adjustment
series and explanations, please refer to the article "Intervention
Analysis Seasonal Adjustment", located on our website at
http://www.bls.gov/cpi/cpisapage.htm.
For additional information on seasonal adjustment in the CPI, please
write to the Bureau of Labor Statistics, Division of Consumer Prices
and Price Indexes, Washington, DC 20212 or contact David Levin at
(202) 691-6968, or by e-mail at Levin.David@bls.gov. If you have
general questions about the CPI, please call our information staff at
(202) 691-7000.
Recalculated Seasonally Adjusted Indexes to be Available on February
15, 2012
Each year with the release of the January CPI, seasonal adjustment
factors are recalculated to reflect price movements from the just-
completed calendar year. This routine annual recalculation may result
in revisions to seasonally adjusted indexes for the previous 5 years.
BLS will make available recalculated seasonally adjusted indexes, as
well as recalculated seasonal adjustment factors, for the period
January 2007 through December 2011, on Wednesday, February 15, 2012.
This date is two working days before the scheduled release of the
January 2012 CPI on Friday, February 17, 2012.
The revised indexes and seasonal factors will be available on the
internet. The address is
http://www.bls.gov/cpi/cpisapage.htm. Look under Seasonal Adjustment
in the CPI and select Revised Seasonally Adjusted Indexes and
Factors, 2007-2011.
For further information please contact David Levin by electronic mail
at: Levin.David@bls.gov or by telephone at: (202) 691-5261.
U.S. Bureau of Labor Statistics