Consumer Price Index Summary
FOR TECHNICAL INFORMATION: Stephen B. Reed (202) 691-7000 USDL-09-0035 CPI QUICKLINE: (202) 691-6994 TRANSMISSION OF FOR CURRENT AND HISTORICAL MATERIAL IN THIS INFORMATION: (202) 691-5200 RELEASE IS EMBARGOED MEDIA CONTACT: (202) 691-5902 UNTIL 8:30 A.M. (EST) INTERNET ADDRESS: http://www.bls.gov/cpi/ Friday, January 16, 2009 CONSUMER PRICE INDEX: DECEMBER 2008 The Consumer Price Index for All Urban Consumers (CPI-U) decreased 1.0 percent in December, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The December level of 210.228 (1982-84=100) was 0.1 percent higher than in December 2007. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) decreased 1.2 percent in December, prior to seasonal adjustment. The December level of 204.813 (1982-84=100) was 0.5 percent lower than in December 2007. The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) decreased 1.3 percent in December on a not seasonally adjusted basis. The December level of 120.661 (December 1999=100) was 0.5 percent lower than in December 2007. Please note that the indexes for the post-2006 period are subject to revision. CPI for All Urban Consumers (CPI-U) On a seasonally adjusted basis, the CPI-U decreased 0.7 percent in December, the third consecutive decline. The index is now only 0.1 percent higher than in December 2007. Declining energy prices, particularly for gasoline, again drove most of the decline. The energy index declined 8.3 percent in December. Within energy, the gasoline index fell 17.2 percent and accounted for almost 90 percent of the decrease in the all items index. The index for household energy declined 0.7 percent. Excluding energy, the index was virtually unchanged for the third straight month. The food index declined 0.1 percent in December, the first (cont.) Table A. Percent changes in CPI for All Urban Consumers (CPI-U) Seasonally adjusted Expenditure Compound Category Changes from preceding month annual Un- rate adjusted 3-mos. 12-mos. June July Aug. Sep. Oct. Nov. Dec. ended ended 2008 2008 2008 2008 2008 2008 2008 Dec. 2008 Dec. 2008 All items.......... 1.1 .8 -.1 .0 -1.0 -1.7 -.7 -12.7 .1 Food and beverages .7 .9 .6 .6 .3 .2 .0 1.7 5.8 Housing........... .5 .6 -.1 -.1 .0 -.1 .0 -.7 2.4 Apparel........... .1 1.2 .5 -.1 -1.0 .3 -.9 -6.4 -1.0 Transportation.... 3.8 1.7 -1.5 -.6 -5.4 -9.8 -4.4 -55.6 -13.3 Medical care...... .2 .1 .2 .3 .2 .2 .3 2.8 2.6 Recreation........ .1 .4 .5 .2 .1 .0 -.2 -.4 1.8 Education and communication.. .5 .5 .2 .1 .2 .2 .3 3.0 3.6 Other goods and services....... .4 .4 .2 .2 .3 .0 .0 .8 3.4 Special indexes: Energy............ 6.6 4.0 -3.1 -1.9 -8.6 -17.0 -8.3 -76.6 -21.3 Food.............. .8 .9 .6 .6 .3 .2 -.1 1.4 5.9 All items less food and energy .3 .3 .2 .1 -.1 .0 .0 -.3 1.8 decrease since April 2006, as many meat, dairy, fruit, and vegetable indexes decreased. The index for all items excluding food and energy was virtually unchanged in December. Continuing decreases in the indexes for lodging away from home, airline fare, and new and used motor vehicles, along with downturns in the indexes for apparel and recreation, offset increases in other indexes including rent and owners' equivalent rent, medical care, and education. For the 12 month period ending December 2008, the CPI-U rose 0.1 percent. This was the smallest calendar year increase since a 0.7 percent decline in 1954 and compares with a 4.1 percent increase for the 12 months ended December 2007. Consumer prices declined at a seasonally adjusted annualized rate (SAAR) of 12.7 percent in the fourth quarter of 2008. This followed increases during the first three quarters at rates of 3.1, 7.9, and 2.6 percent, respectively. The index for energy declined at a SAAR of 76.6 percent during the fourth quarter and fell 21.3 percent for the 12 months ending December after rising 17.4 percent during 2007. Petroleum-based energy prices declined 40.5 percent during 2008 while prices for energy services rose 7.7 percent. The food index rose 5.9 percent in 2008 compared to 4.9 percent in 2007, with grocery store food prices rising 6.6 percent in 2008 compared to 5.6 percent in 2007. In both cases, the 2008 increases were the largest since 1980. Among the grocery store food groups, the 2008 increases ranged from a low of 2.7 percent for dairy and related products to a high of 11.7 percent for cereals and bakery products. Excluding food and energy, the CPI declined at a 0.3 percent SAAR during the last quarter of 2008, after increasing at rates of 2.0, 2.5, and 2.7 percent during the first three quarters, respectively. The 1.8 percent increase for all of 2008 compares to 2.4 percent during 2007 and is the smallest one-year increase since 2003. The smaller increase reflects slower advances in prices for shelter and medical care as well as a decline in the price of new and used motor vehicles. Shelter costs rose 1.9 percent in 2008 after increasing 3.1 percent in 2007, while medical care prices rose 2.6 percent in 2008 after increasing 5.2 percent in 2007. Prices for new and used motor vehicles declined 3.5 percent during 2008 after being virtually unchanged during 2007. The annual rates for selected groups for the last eight years are shown below. Percentage change 12 months ended in December 2001 2002 2003 2004 2005 2006 2007 2008 All items........... 1.6 2.4 1.9 3.3 3.4 2.5 4.1 .1 Food and beverages 2.8 1.5 3.5 2.6 2.3 2.2 4.8 5.8 Housing............ 2.9 2.4 2.2 3.0 4.0 3.3 3.0 2.4 Apparel............ -3.2 -1.8 -2.1 -.2 -1.1 .9 -.3 -1.0 Transportation..... -3.8 3.8 .3 6.5 4.8 1.6 8.3 -13.3 Medical care....... 4.7 5.0 3.7 4.2 4.3 3.6 5.2 2.6 Recreation......... 1.5 1.1 1.1 .7 1.1 1.0 .8 1.8 Education and communication..... 3.2 2.2 1.6 1.5 2.4 2.3 3.0 3.6 Other goods and services.......... 4.5 3.3 1.5 2.5 3.1 3.0 3.3 3.4 Special indexes: Energy............. -13.0 10.7 6.9 16.6 17.1 2.9 17.4 -21.3 Energy commodities -24.5 23.7 6.9 26.7 16.7 6.1 29.4 -40.5 Energy services... -1.5 .4 6.9 6.8 17.6 -.6 3.4 7.7 All items less energy............ 2.8 1.8 1.5 2.2 2.2 2.5 2.8 2.4 Food.............. 2.8 1.5 3.6 2.7 2.3 2.1 4.9 5.9 All items less food and energy........ 2.7 1.9 1.1 2.2 2.2 2.6 2.4 1.8 The food and beverages index was virtually unchanged in December, as increases in the indexes for food away from home and alcoholic beverages offset a 0.4 percent decline in the food at home index. Within food at home, the indexes for three of the six major grocery store food groups declined. The fruits and vegetables index declined 2.4 percent in December, the fourth consecutive decrease, with fresh vegetables down 4.4 percent. The index for dairy and related products turned down in December, falling 0.9 percent after rising 0.4 percent in November. For the year, the indexes for fruits and vegetables and for dairy and related products rose 3.4 percent and 2.7 percent, respectively. The index for meats, poultry, fish and eggs declined 0.5 percent in December, but was up 5.1 percent for the year. The December decrease was driven by a 6.6 percent decline in the index for eggs. The indexes for cereals and bakery products and for other food at home both increased in December. The former index rose 0.3 percent in December and posted an 11.7 percent 12 month increase, while the latter climbed 0.6 percent and was up 9.3 percent for the year. The index for nonalcoholic beverages was virtually unchanged in December and has increased 5.9 percent since December 2007. The index for food away from home advanced 0.3 percent in December while the alcoholic beverages index increased 0.6 percent. The index for housing was virtually unchanged in December after declining 0.1 percent in November. The shelter index, which rose 0.2 percent in November, was also virtually unchanged. Increases in the indexes for rent and owners' equivalent rent of 0.2 percent and 0.1 percent, respectively, offset a 0.7 percent decline in the index for lodging away from home. For the 12 months ending December, the housing index rose 2.4 percent, with the index for shelter increasing 1.9 percent. The household energy index declined 0.7 percent in December, but registered a 5.9 percent increase over the last 12 months. Within household energy, the index for fuel oil declined sharply, down 12.7 percent in December and 21.0 percent over the last year. The natural gas index declined 1.6 percent but was up 5.5 percent during 2008. The electricity index increased in December, rising 0.6 percent to a level 8.6 percent above a year ago. The index for household furnishings and operations increased 0.1 percent in December. The transportation index fell 4.4 percent in December as several of its major components continue to decline. This was the fifth consecutive monthly decrease and the index is now down 13.3 percent over the past year. The motor fuel index decreased 16.8 percent in December. (Before seasonal adjustment, motor fuel prices fell 20.3 percent in December and were 42.2 percent below their December 2007 level) The index for new and used motor vehicles fell for the fifth straight month, declining 0.4 percent. The new vehicles index declined 0.4 percent and the index for used cars and trucks fell 0.8 percent. The index for public transportation declined 1.3 percent in December as the airline fare index decreased 1.2 percent. This was the fourth straight decline in the airline fare index, but it was still 1.4 percent higher than in December 2007. The index for apparel turned down in December, declining 0.9 percent after rising 0.3 percent in November. Prior to seasonal adjustment, apparel prices fell 3.5 percent, and are 1.0 percent below their December 2007 level. The index for medical care rose 0.3 percent in December after increasing 0.2 percent in November, and is up 2.6 percent over the past year. The medical care commodities index increased 0.5 percent, with the index for nonprescription drugs and medical supplies rising 1.1 percent. The index for medical care services advanced 0.2 percent in December after rising 0.1 percent in November. The physicians' services index increased 0.4 percent and the index for hospital and related services rose 0.5 percent. After being virtually unchanged in November, the index for recreation declined 0.2 percent in December. Decreases in the indexes for sporting goods, for photography, and for toys contributed to the decline. The index for video and audio, which fell 0.1 percent in November, increased 0.1 percent in December. The recreation index has increased 1.8 percent over the past year. The index for education and communication rose 0.3 percent in December after advancing 0.2 percent in November and has risen 3.6 percent over the past year. The index for education increased 0.5 percent in December and the index for communication rose 0.2 percent. Within the latter group, the telephone services index increased 0.1 percent and the index for information technology, hardware and services rose 0.4 percent. The index for other goods and services was virtually unchanged for the second consecutive month and rose 3.4 percent during all of 2008. The index for tobacco and smoking products rose 0.5 percent in December after being virtually unchanged in November. The index for personal care turned down in December, falling 0.2 percent after being virtually unchanged in November. CPI for Urban Wage Earners and Clerical Workers (CPI-W) On a seasonally adjusted basis, the CPI for Urban Wage Earners and Clerical Workers decreased 0.9 percent in December. Table B. Percent changes in CPI for Urban Wage Earners and Clerical Workers (CPI-W) Seasonally adjusted Expenditure Compound Category Changes from preceding month annual Un- rate adjusted 3-mos. 12-mos. June July Aug. Sep. Oct. Nov. Dec. ended ended 2008 2008 2008 2008 2008 2008 2008 Dec. 2008 Dec. 2008 All items.......... 1.2 .9 -.2 -.1 -1.2 -2.1 -.9 -15.7 -.5 Food and beverages .8 .9 .6 .6 .3 .2 .0 1.8 5.9 Housing........... .5 .7 .0 -.2 .0 -.1 .0 -.2 2.8 Apparel........... .0 .8 1.0 .0 -1.2 .2 -1.0 -7.7 -.9 Transportation.... 4.0 1.8 -1.7 -.7 -6.0 -10.9 -5.0 -59.8 -15.3 Medical care...... .2 .1 .3 .3 .1 .2 .3 2.6 2.7 Recreation........ .2 .4 .5 .2 .0 -.1 -.2 -.8 1.6 Education and communication.. .5 .5 .2 .0 .2 .2 .3 2.8 3.4 Other goods and services....... .6 .5 .2 .2 .3 .1 .1 1.8 4.1 Special indexes: Energy............ 6.8 4.0 -3.2 -1.7 -9.0 -17.8 -8.7 -78.2 -22.6 Food.............. .8 .9 .6 .6 .3 .2 -.1 1.5 6.0 All items less food and energy .3 .3 .2 .1 -.1 .0 .0 -.3 1.7 Consumer Price Index data for January are scheduled for release on Friday, February 20, 2009, at 8:30 A.M. (EST). 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 in 87 urban areas across the country from about 50,000 housing units and approximately 23,000 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 100.0. 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 116.5. 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 0.06 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 0.12 percent of the 1 month percentage change based on all retail prices. 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 0.08 and 0.32 percent. For the latest data, including information on how to use the estimates of standard error, see "Variance Estimates for Changes in the Consumer Price Index, January 2005- December 2005" in the CPI Detailed Report, February 2006. These data are available on the CPI home page (http://www.bls.gov/cpi), using the following link http://www.bls.gov/cpi/cpivar2006.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 2003 through December 2007 were replaced in January 2008. 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. The seasonal movement of All items and 54 other aggregations is derived by combining the seasonal movement of 73 selected components. Each year the seasonal status of every series is reevaluated based upon certain statistical criteria. If any of the 73 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 will be used before that period. Note: 48 of the 73 components are seasonally adjusted for 2008. 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 2008, BLS adjusted 20 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 Jeff Wilson at (202) 691- 6968, or by e-mail at Wilson.Jeff@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 18, 2009 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 2004 through December 2008, on Wednesday, February 18, 2009. This date is two working days before the scheduled release of the January 2009 CPI on Friday, February 20, 2009. 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, 2004-2008. For further information please contact Jeff Wilson by electronic mail at: Wilson.Jeff@bls.gov or by telephone at: (202) 691-5382. .
- Table 1. Consumer Price Index for All Urban Consumers (CPI-U): U. S. City Average, by expenditure category and commodity and service group
- Table 2. Consumer Price Index for All Urban Consumers (CPI-U): Seasonally adjusted U. S. City Average, by expenditure category and commodity and service group
- Table 3. Consumer Price Index for All Urban Consumers (CPI-U): Selected areas, all items index
- Table 4. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): U. S. City Average, by expenditure category and commodity and service group
- Table 5. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): Seasonally adjusted U. S. City Average, by expenditure category and commodity and service group
- Table 6. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): Selected areas, all items index
- Table 7. Chained Consumer Price Index for All Urban Consumers (C-CPI-U): U.S. city average, by expenditure category and commodity and service group
- Table 1A. Consumer Price Index for All Urban Consumers (CPI-U): U.S. city average, by expenditure category and commodity and service group
- Table 4A. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): U.S. city average, by expenditure category and commodity and service group
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Last Modified Date: January 16, 2009