Washington, DC…The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in December on a seasonally adjusted basis after rising 0.8 percent in November, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 7.0 percent before seasonal adjustment.

Increases in the indexes for shelter and for used cars and trucks were the largest contributors to the seasonally adjusted all items increase. The food index also contributed, although it increased less than in recent months, rising 0.5 percent in December. The energy index declined in December, ending a long series of increases; it fell 0.4 percent as the indexes for gasoline and natural gas both decreased.

The index for all items less food and energy rose 0.6 percent in December following a 0.5-percent increase in November. This was the sixth time in the last 9 months it has increased at least 0.5 percent. Along with the indexes for shelter and for used cars and trucks, the indexes for household furnishings and operations, apparel, new vehicles, and medical care all increased in December. As in November, the indexes for motor vehicle insurance and recreation were among the few to decline over the month.

The all items index rose 7.0 percent for the 12 months ending December, the largest 12-month increase since the period ending June 1982. The all items
less food and energy index rose 5.5 percent, the largest 12-month change since the period ending February 1991. The energy index rose 29.3 percent
over the last year, and the food index increased 6.3 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
2021 2021 2021 2021 2021 2021 2021 Dec.
2021

All items……………… .9 .5 .3 .4 .9 .8 .5 7.0
Food…………………. .8 .7 .4 .9 .9 .7 .5 6.3
Food at home…………. .8 .7 .4 1.2 1.0 .8 .4 6.5
Food away from home (1).. .7 .8 .4 .5 .8 .6 .6 6.0
Energy……………….. 1.5 1.6 2.0 1.3 4.8 3.5 -.4 29.3
Energy commodities……. 2.6 2.3 2.7 1.3 6.2 5.9 -.6 48.9
Gasoline (all types)…. 2.5 2.4 2.8 1.2 6.1 6.1 -.5 49.6
Fuel oil (1)………… 2.9 .6 -2.1 3.9 12.3 3.5 -2.4 41.0
Energy services………. .2 .8 1.1 1.2 3.0 .3 -.1 10.4
Electricity…………. -.3 .4 1.0 .8 1.8 .3 .3 6.3
Utility (piped) gas
service………….. 1.7 2.2 1.6 2.7 6.6 .6 -1.2 24.1
All items less food and
energy…………….. .9 .3 .1 .2 .6 .5 .6 5.5
Commodities less food and
energy commodities…. 2.2 .5 .3 .2 1.0 .9 1.2 10.7
New vehicles………… 2.0 1.7 1.2 1.3 1.4 1.1 1.0 11.8
Used cars and trucks…. 10.5 .2 -1.5 -.7 2.5 2.5 3.5 37.3
Apparel…………….. .7 .0 .4 -1.1 .0 1.3 1.7 5.8
Medical care
commodities (1)…… -.4 .2 -.2 .3 .6 .1 .0 .4
Services less energy
services………….. .4 .3 .0 .2 .4 .4 .3 3.7
Shelter…………….. .5 .4 .2 .4 .5 .5 .4 4.1
Transportation services 1.5 -1.1 -2.3 -.5 .4 .7 -.3 4.2
Medical care services… .0 .3 .3 -.1 .5 .3 .3 2.5

1 Not seasonally adjusted.

Food

The food index increased 0.5 percent in December following larger increases in each of the three previous months. The food at home index increased 0.4 percent in December after rising 0.8 percent in November. Five of the six major grocery store food group indexes increased in December. The index for fruits and vegetables increased the most, rising 0.9 percent over the month as the index for fresh fruits increased 1.8 percent. The index for nonalcoholic beverages rose 0.8 percent in December, and the index for dairy and related products increased 0.7 percent. The index for other food at home rose 0.6 percent, and the index for cereals and bakery products increased 0.4 percent over the month.

The index for meats, poultry, fish, and eggs declined in December, falling 0.4
percent after rising at least 0.7 percent in each of the last 7 months. The
indexes for beef (-2.0 percent) and pork (-0.8 percent) declined after recent
sharp increases.

The food away from home index rose 0.6 percent in December, the same increase
as in November. The index for full service meals rose 0.8 percent, and the
index for limited service meals advanced 0.6 percent over the month.

The food at home index rose 6.5 percent over the last 12 months; this compares
to a 1.5-percent annual increase over the last 10 years. All of the six major
grocery store food group indexes increased over the period. By far the largest
increase was that of the index for meats, poultry, fish, and eggs, which rose
12.5 percent over the year despite falling in December. The index for dairy
and related products increased 1.6 percent, the smallest increase among the
groups.

The index for food away from home rose 6.0 percent over the last year, the
largest increase since January 1982. The index for limited service meals rose
8.0 percent over the last 12 months, and the index for full service meals rose
6.6 percent. The index for food at employee sites and schools, in contrast,
declined 49.3 percent over the past 12 months, reflecting widespread free lunch
programs.

Energy

The energy index declined 0.4 percent in December; this followed a 3.5-percent
increase in November and was its first decrease since April 2021. The gasoline
index fell 0.5 percent in December after rising 6.1 percent in both November
and October. (Before seasonal adjustment, gasoline prices fell 2.2 percent in
December.) The index for natural gas also declined in December, falling 1.2
percent after rising in each of the last 10 months. The electricity index,
in contrast, rose in December, increasing 0.3 percent, the same increase as
in November.

The energy index rose 29.3 percent over the past 12 months with all major
energy component indexes increasing. The gasoline index rose 49.6 percent
over the last year. The index for natural gas rose 24.1 percent over the
last 12 months, and the electricity index rose 6.3 percent.

All items less food and energy

The index for all items less food and energy rose 0.6 percent in December. The
shelter index increased 0.4 percent in December as the indexes for rent and
owners’ equivalent rent both rose 0.4 percent, the same increases as in November
and October. The index for used cars and trucks continued to rise, advancing 3.5
percent in December after increasing 2.5 percent in each of the prior 2 months.

The index for household furnishings and operations rose 1.1 percent over the
month as the indexes for furniture and bedding and for housekeeping supplies
increased. The apparel index rose 1.7 percent over the month, its largest
increase since January 2021. The index for new vehicles continued to rise,
increasing 1.0 percent in December; this was its eighth consecutive monthly
increase of at least 1.0 percent.

The medical care index rose 0.3 percent in December. The index for hospital
services increased 0.2 percent and the index for prescription drugs rose 0.1
percent, while the index for physicians’ services was unchanged. Other indexes
that rose in December include airline fares (+2.7 percent), personal care (+0.5
percent), tobacco (+0.7 percent), and education (+0.1 percent).

In contrast to these increases, the motor vehicle insurance index fell 1.5
percent in December after declining 0.8 percent the prior month. The recreation
index fell 0.2 percent in December, the same decline as last month. The
communication index was unchanged over the month.

The index for all items less food and energy rose 5.5 percent over the past 12
months, its largest 12-month increase since the period ending February 1991.
Major contributors to this increase include shelter (+4.1 percent) and used
cars and trucks (+37.3 percent). However, the increase is broad-based, with
virtually all component indexes showing increases over the past 12 months.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 7.0 percent
over the last 12 months to an index level of 278.802 (1982-84=100). For the
month, the index increased 0.3 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
increased 7.8 percent over the last 12 months to an index level of 273.925
(1982-84=100). For the month, the index rose 0.3 percent prior to seasonal
adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased
6.9 percent over the last 12 months. For the month, the index increased 0.3
percent on a not seasonally adjusted basis. Please note that the indexes for
the past 10 to 12 months are subject to revision.

_______________

The Consumer Price Index for January 2022 is scheduled to be released on
Thursday, February 10, 2022 at 8:30 a.m. (ET).

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Coronavirus (COVID-19) Pandemic Impact on December 2021 Consumer Price Index Data

Data collection by personal visit for the Consumer Price Index (CPI) program has been suspended
almost entirely since March 16, 2020. When possible, data normally collected by personal visit
were collected either online or by phone. Additionally, data collection in December was affected by
the temporary closing or limited operations of certain types of establishments. These factors
resulted in an increase in the number of prices considered temporarily unavailable and imputed.
While the CPI program attempted to collect as much data as possible, many indexes are based on
smaller amounts of collected prices than usual, and a small number of indexes that are normally
published were not published this month.

For each month from March 2020 to December 2021, BLS has published a summary of the impact of the
pandemic on the Consumer Price Index news release and data. The impact summary for December is
available at www.bls.gov/covid19/consumer-price-index-covid19-impacts-december-2021.htm. Beginning
with publication of January 2022 data in February 2022, this month-specific impact summary will be
discontinued. However, information related to the impact of the pandemic will continue to be
available at www.bls.gov/covid19/effects-of-covid-19-pandemic-on-consumer-price-index.htm.

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Technical Note

Brief Explanation of the CPI

The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods
and services. The CPI reflects spending patterns for each of two population groups: all
urban consumers and urban wage earners and clerical workers. The all urban consumer group
represents about 93 percent of the total U.S. population. It is based on the expenditures
of almost all residents of urban or metropolitan areas, including professionals, the self-
employed, the poor, the unemployed, and retired people, as well as urban wage earners and
clerical workers. Not included in the CPI are the spending patterns of people living in
rural nonmetropolitan areas, farming families, people in the Armed Forces, and those in
institutions, such as prisons and mental hospitals. Consumer inflation for all urban
consumers is measured by two indexes, namely, the Consumer Price Index for All Urban
Consumers (CPI-U) and the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is based on
the expenditures of households included in the CPI-U definition that meet two requirements:
more than one-half of the household’s income must come from clerical or wage occupations,
and at least one of the household’s earners must have been employed for at least 37 weeks
during the previous 12 months. The CPI-W population represents about 29 percent of the
total U.S. population and is a subset of the CPI-U population.

The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors’
and dentists’ services, drugs, and other goods and services that people buy for day-to-day
living. Prices are collected each month in 75 urban areas across the country from about
6,000 housing units and approximately 22,000 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 75 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 by the Bureau’s
trained representatives.

In calculating the index, price changes for the various items in each location are
aggregated using 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 23
selected 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. The CPI-U and CPI-W are
considered final when released, but the C-CPI-U is issued in preliminary form and subject
to three subsequent quarterly revisions.

The index measures price change from a designed reference date. For most of 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 7 percent from the reference base, for
example, is shown as 107.000. Alternatively, that relationship can also be expressed as
the price of a base period market basket of goods and services rising from $100 to $107.

Sampling Error in the CPI

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 CPI. 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 percent of these
estimates will 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-U, 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 https://www.bls.gov/cpi/tables/variance-estimates/home.htm.

Calculating Index Changes

Movements of the indexes from 1 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 following
table shows an example of using index values to calculate percent changes:

Item A Item B Item C
Year I 112.500 225.000 110.000
Year II 121.500 243.000 128.000
Change in index points 9.000 18.000 18.000
Percent change 9.0/112.500 x 100 = 8.0 18.0/225.000 x 100 = 8.0 18.0/110.000 x 100 = 16.4

Use of Seasonally Adjusted and Unadjusted Data

The Consumer Price Index (CPI) produces both unadjusted and seasonally adjusted data.
Seasonally adjusted data are computed using seasonal factors derived by the X-13ARIMA-
SEATS seasonal adjustment method. These factors are updated each February, and the new
factors are used to revise the previous 5 years of seasonally adjusted data. The factors
are available at www.bls.gov/cpi/tables/seasonal-adjustment/seasonal-factors-2021.xlsx.
For more information on data revision scheduling, please see the Factsheet on Seasonal
Adjustment at www.bls.gov/cpi/seasonal-adjustment/questions-and-answers.htm and the
Timeline of Seasonal Adjustment Methodological Changes at
www.bls.gov/cpi/seasonal-adjustment/timeline-seasonal-adjustment-methodology-changes.htm.

For analyzing short-term 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 weather events, production cycles, model changeovers, holidays, and sales. This
allows data users to focus on changes that are not typical for the time of year. The
unadjusted data are of primary interest to consumers concerned about the prices they
actually pay. Unadjusted data are also 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. BLS advises
against the use of seasonally adjusted data in escalation agreements because seasonally
adjusted series are revised annually.

Intervention Analysis

The Bureau of Labor Statistics uses intervention analysis seasonal adjustment for some
CPI series. Sometimes extreme values or sharp movements can distort the underlying seasonal
pattern of price change. Intervention analysis seasonal adjustment is a process by which
the distortions caused by such unusual events are estimated and removed from the data prior
to calculation of seasonal factors. The resulting seasonal factors, which more accurately
represent the seasonal pattern, are then applied to the unadjusted data.

For example, this procedure was used for the motor fuel series to offset the effects of
the 2009 return to normal pricing after the worldwide economic downturn in 2008. Retaining
this outlier data during seasonal factor calculation would distort the computation of the
seasonal portion of the time series data for motor fuel, so it was estimated and removed
from the data prior to seasonal adjustment. Following that, seasonal factors were
calculated based on this “prior adjusted” data. These seasonal factors represent a clearer
picture of the seasonal pattern in the data. The last step is for motor fuel seasonal
factors to be applied to the unadjusted data.

For the seasonal factors introduced for January 2021, BLS adjusted 72 series using
intervention analysis seasonal adjustment, including selected food and beverage items,
motor fuels, electricity, and vehicles.

Revision of Seasonally Adjusted Indexes

Seasonally adjusted data, including the U.S. city average all items index levels, are subject
to revision for up to 5 years after their original release. Every year, economists in the CPI
calculate new seasonal factors for seasonally adjusted series and apply them to the last 5
years of data. Seasonally adjusted indexes beyond the last 5 years of data are considered to
be final and not subject to revision. For January 2021, revised seasonal factors and
seasonally adjusted indexes for 2016 to 2020 were calculated and published. For series which
are directly adjusted using the Census X-13ARIMA-SEATS seasonal adjustment software, the
seasonal factors for 2020 will be applied to data for 2021 to produce the seasonally adjusted
2021 indexes. Series which are indirectly seasonally adjusted by summing seasonally adjusted
component series have seasonal factors which are derived and are therefore not available in
advance.

Determining Seasonal Status

Each year the seasonal status of every series is reevaluated based upon certain statistical
criteria. Using these criteria, BLS economists determine whether a series should change its
status from “not seasonally adjusted” to “seasonally adjusted”, or vice versa. If any of the
81 components of the U.S. city average all items index 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. Thirty-four of the 81 components of the U.S.
city average all items index are not seasonally adjusted for 2021.

Contact Information

For additional information about the CPI visit www.bls.gov/cpi or contact the CPI Information
and Analysis Section at 202-691-7000 or cpi_info@bls.gov.

For additional information on seasonal adjustment in the CPI visit
www.bls.gov/cpi/seasonal-adjustment/home.htm or contact the CPI seasonal adjustment section at
202-691-6968 or cpiseas@bls.gov.

Information from this release will be made available to sensory impaired individuals upon
request. Voice phone: 202-691-5200; Federal Relay Service: 1-800-877-8339.