Washington, DC…The Consumer Price Index for All Urban Consumers (CPI-U) declined 0.1 percent in December on a
seasonally adjusted basis, after increasing 0.1 percent in November, the U.S. Bureau of Labor
Statistics reported today. Over the last 12 months, the all items index increased 6.5 percent before
seasonal adjustment.

The index for gasoline was by far the largest contributor to the monthly all items decrease, more than
offsetting increases in shelter indexes. The food index increased 0.3 percent over the month with the
food at home index rising 0.2 percent. The energy index decreased 4.5 percent over the month as the
gasoline index declined; other major energy component indexes increased over the month.

The index for all items less food and energy rose 0.3 percent in December, after rising 0.2 percent
in November. Indexes which increased in December include the shelter, household furnishings and
operations, motor vehicle insurance, recreation, and apparel indexes. The indexes for used cars and
trucks, and airline fares were among those that decreased over the month.

The all items index increased 6.5 percent for the 12 months ending December; this was the smallest
12-month increase since the period ending October 2021. The all items less food and energy index rose
5.7 percent over the last 12 months. The energy index increased 7.3 percent for the 12 months ending
December, and the food index increased 10.4 percent over the last year; all of these increases were
smaller than for the 12-month period ending November.

Food

The food index increased 0.3 percent in December following a 0.5-percent increase in November. The
food at home index rose 0.2 percent in December. Three of the six major grocery store food group
indexes increased over the month. The index for meats, poultry, fish, and eggs increased 1.0 percent
in December, as the index for eggs rose 11.1 percent. The index for other food at home rose 0.4
percent over the month, while the index for nonalcoholic beverages increased 0.1 percent in December.

In contrast, the fruits and vegetables index fell 0.6 percent over the month with the fresh fruit
index declining 1.9 percent. The index for dairy and related products decreased 0.3 percent in
December, and the index for cereals and bakery products was unchanged. 

The food away from home index rose 0.4 percent in December, after increasing 0.5 percent in November.
The index for limited service meals increased 0.5 percent over the month and the index for full
service meals increased 0.1 percent. 

The food at home index rose 11.8 percent over the last 12 months. The index for cereals and bakery
products rose 16.1 percent over the year. The remaining major grocery store food groups posted
increases ranging from 7.7 percent (meats, poultry, fish, and eggs) to 15.3 percent (dairy and related
products).

The index for food away from home rose 8.3 percent over the last year. The index for full service
meals rose 8.2 percent over the last 12 months, and the index for limited service meals rose 6.6
percent over the same period. 

Energy

The energy index fell 4.5 percent in December after falling 1.6 percent in November. The gasoline
index declined 9.4 percent over the month, following a 2.0-percent decrease in November. (Before
seasonal adjustment, gasoline prices fell 12.5 percent in December.) The index for natural gas rose
over the month, increasing 3.0 percent after decreasing 3.5 percent in November. The electricity
index increased 1.0 percent in December.

The energy index rose 7.3 percent over the past 12 months. The gasoline index decreased 1.5 percent
over the span. The fuel oil index rose 41.5 percent over the last 12 months, the index for electricity
rose 14.3 percent, and the index for natural gas increased 19.3 percent over the same period.

All items less food and energy

The index for all items less food and energy rose 0.3 percent in December, following a 0.2-percent
increase in November. The shelter index continued to increase, rising 0.8 percent over the month. The
rent index rose 0.8 percent over the month, and the owners' equivalent rent index also rose 0.8
percent. The index for lodging away from home increased 1.5 percent in December, after falling 0.7
percent in November. 

The shelter index was the dominant factor in the monthly increase in the index for all items less food
and energy, while other components were a mix of increases and declines. Among the other indexes that
rose in December was the index for household furnishings and operations, which increased 0.3 percent
over the month, while the index for motor vehicle insurance rose 0.6 percent, and the index for
recreation increased 0.2 percent. The apparel index rose 0.5 percent in December, and the education
index increased 0.3 percent.

The medical care index rose 0.1 percent in December, after declining in the previous 2 months. The
index for hospital services increased 1.7 percent over the month. The physicians' services index and
the prescription drugs index both rose 0.1 percent in December. 

Indexes which declined over the month include the index for used cars and trucks, which fell 2.5
percent in December, the sixth consecutive decline in that index. The index for airline fares fell
3.1 percent over the month, following a 3.0-percent decrease in November. The new vehicles index
declined 0.1 percent in December, as did the personal care index.

The index for all items less food and energy rose 5.7 percent over the past 12 months. The shelter
index increased 7.5 percent over the last year, accounting for more than half of the total increase
in all items less food and energy. Other indexes with notable increases over the last year include
household furnishings and operations (+6.7 percent), medical care (+4.0 percent), new vehicles (+5.9
percent), and recreation (+5.1 percent). 

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 6.5 percent over the last 12 months
to an index level of 296.797 (1982-84=100). For the month, the index decreased 0.3 percent prior to
seasonal adjustment.  

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 6.3 percent
over the last 12 months to an index level of 291.051 (1982-84=100). For the month, the index decreased
0.5 percent prior to seasonal adjustment.  

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 6.4 percent over the last
12 months. For the month, the index decreased 0.2 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 2023 is scheduled to be released on Tuesday, February 14, 2023,
at 8:30 a.m. (ET).


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			January 2023 Consumer Price Index Weight Update

Starting with January 2023 data, BLS plans to update weights annually for the Consumer
Price Index based on a single calendar year of data, using consumer expenditure data from
2021. This reflects a change from prior practice of updating weights biennially using two
years of expenditure data.
 
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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 visit, telephone call, or web collection 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 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-2022.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 (IASA) 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 2022, 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 2022, revised seasonal factors and seasonally adjusted 
indexes for 2017 to 2021 were calculated and published. For series which are directly adjusted 
using the Census X-13ARIMA-SEATS seasonal adjustment software, the seasonal factors for 2021 will 
be applied to data for 2022 to produce the seasonally adjusted 2022 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. For 2022, 22 of the 81 components of the U.S. city 
average all items index are seasonally adjusted.

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. 

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