Washington, DC…The Consumer Price Index for All Urban Consumers (CPI-U) increased
0.4 percent in January on a seasonally adjusted basis, the U.S.
Bureau of Labor Statistics reported today. Over the last 12 months,
the all items index increased 1.6 percent before seasonal adjustment.

Increases in indexes for energy commodities and for food accounted
for over two thirds of the all items increase. The indexes for
gasoline and fuel oil both increased in January, continuing their
recent strong upward trend. The index for food at home posted its
largest increase in over two years with all six major grocery store
food group indexes rising.

The index for all items less food and energy also rose in January.
The indexes for apparel, shelter, airline fares, and recreation all
posted increases. In contrast, the indexes for new vehicles and for
used cars and trucks declined in January.

Over the last 12 months, the food index has risen 1.8 percent with
the food at home index up 2.1 percent; both 12-month changes are the
highest since 2009. The energy index has increased 7.3 percent over
the last 12 months, with the gasoline index up 13.4 percent. The
index for all items less food and energy has risen 1.0 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.
July Aug. Sep. Oct. Nov. Dec. Jan. ended
2010 2010 2010 2010 2010 2010 2011 Jan.
2011

All items……………… .3 .2 .2 .2 .1 .4 .4 1.6
Food…………………. .0 .1 .3 .1 .2 .1 .5 1.8
Food at home…………. .0 .0 .4 .1 .2 .2 .7 2.1
Food away from home (1).. .0 .3 .3 .1 .1 .1 .2 1.5
Energy……………….. 3.3 1.6 1.1 2.5 .1 4.0 2.1 7.3
Energy commodities……. 5.6 2.6 2.2 4.4 .7 6.4 4.0 13.4
Gasoline (all types)…. 6.2 2.9 2.2 4.5 .7 6.7 3.5 13.4
Fuel oil (1)………… -1.6 .9 .8 4.7 4.2 4.9 6.8 17.3
Energy services………. .5 .4 -.4 .0 -.8 .6 -.6 -.7
Electricity…………. .4 .1 -.1 .2 .6 .3 -.5 1.2
Utility (piped) gas
service………….. .8 1.4 -1.4 -.6 -5.3 1.7 -1.2 -6.4
All items less food and
energy…………….. .1 .1 .0 .0 .1 .1 .2 1.0
Commodities less food and
energy commodities…. .1 .1 -.2 -.2 .0 -.1 .2 -.2
New vehicles………… .1 .2 .1 -.1 -.2 -.1 -.1 .1
Used cars and trucks…. .5 .9 -.4 -.6 .1 -.1 -.3 2.4
Apparel…………….. .1 .0 -.5 -.2 .1 .1 1.0 .0
Medical care commodities
(1)……………… -.2 .2 .3 .1 .2 .1 .5 2.7
Services less energy
services………….. .1 .0 .1 .1 .2 .1 .1 1.4
Shelter…………….. .1 .0 .0 .1 .1 .1 .1 .6
Transportation services .0 .0 .3 .3 .4 .2 .6 3.4
Medical care services… .0 .2 .7 .2 .2 .3 -.1 3.0

1 Not seasonally adjusted.

Consumer Price Index Data for January 2011

Food

The food index rose 0.5 percent in January. The food at home index
increased 0.7 percent, the largest increase since 2008. All six major
grocery store food groups posted increases. The index for
nonalcoholic beverages increased the most, rising 1.5 percent, with
the indexes for carbonated drinks and coffee both rising sharply. The
fruits and vegetables index increased 1.3 percent with the index for
fresh vegetables up 2.1 percent. The indexes for meats, poultry,
fish, and eggs and for cereals and bakery products increased 0.9
percent and 0.8 percent, respectively. The indexes for dairy and
related products and for other food at home posted slight increases.
Over the past 12 months, the index for meats, poultry, fish, and eggs
has risen 6.2 percent with the other grocery store food group indexes
posting smaller increases. The index for food away from home rose 0.2
percent in January and has risen 1.5 percent over the past 12 months.

Energy

The energy index continued its recent string of increases, rising 2.1
percent in January. The gasoline index rose 3.5 percent and has
increased seven months in a row. (Before seasonal adjustment,
gasoline prices rose 3.8 percent in January.) The index for household
energy declined in January, falling 0.2 percent. A 6.8 percent
increase in the index for fuel oil was more than offset by a 1.2
percent decrease in the natural gas index and a 0.5 percent decline
in the electricity index. The indexes for gasoline and fuel oil have
risen significantly over the last 12 months, but the index for
natural gas has declined 6.4 percent.

All items less food and energy

The index for all items less food and energy rose 0.2 percent in
January after increasing 0.1 percent in each of the previous two
months. The shelter index rose 0.1 percent in January, with the rent
index increasing 0.2 percent and the index for owners’ equivalent
rent rising 0.1 percent. The apparel index, which increased 0.1
percent in December, rose 1.0 percent in January. The index for
airline fares increased for the fifth month in a row, rising 2.2
percent in January. The medical care index rose slightly, edging up
0.1 percent, with the medical care commodities index increasing 0.5
percent while the index for medical care services declined 0.1
percent. The recreation index turned up in January, rising 0.2
percent after declining 0.2 percent in December, as did the index for
household furnishings and operations, which increased 0.1 percent in
January after declining in each of the four prior months. In contrast
to these increases, the index for new vehicles fell 0.1 percent in
January and the index for used cars and trucks declined 0.3 percent.

The index for all items less food and energy increased 1.0 percent
over the last 12 months. The shelter index has gone up 0.6 percent
over that time period with the rent index up 1.0 percent. The index
for airline fares has risen 9.8 percent and the indexes for medical
care, for used cars and trucks, and for tobacco also increased. The
apparel index is unchanged from a year ago, while the indexes for
household furnishings and operations and for recreation have
declined.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased
1.6 percent over the last 12 months to an index level of 220.223
(1982-84=100). For the month, the index increased 0.5 percent prior
to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) increased 1.8 percent over the last 12 months to an index
level of 216.400 (1982-84=100). For the month, the index rose 0.5
percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U)
increased 1.4 percent over the last 12 months. For the month, the
index increased 0.5 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 February 2011 is scheduled to be
released on Thursday, March 17, 2011, at 8:30 a.m. (EDT).

———————————————————————————–
Effective with this release of CPI data, the following series have been re-titled:
• Recreation services has become Other recreation services
• Gas (piped) and electricity has become Energy services
• Canned fish and seafood has become Shelf stable fish and seafood

The Recreation services index did not include all services under the
major group Recreation, specifically video and audio related services,
pet services, and photography and film services are excluded. The new
title, Other recreation services, reflects these exclusions.

Gas (piped) and electricity has been presented as Energy services in Table A
of the CPI News Release since August 2009. At that time, the format text of
the News Release was updated to focus on Food, Energy, and All items less
food and energy instead of the major groups (Food, Housing, Apparel,
Transportation, Medical care, Education and communication, Recreation, and
Other goods and services). The title has been changed in the remainder of
the publication tables in January 2011 to improve consistency.

The title for Canned fish and seafood has changed to Shelf stable fish and
seafood to better reflect current packaging methods.
———————————————————————————-

Revised seasonally adjusted changes
Over-the-month percent changes in the U.S. City Average Consumer
Price Index for All Urban Consumers (CPI-U) for All Items and for All
Items less food and energy, seasonally adjusted, using former and
recalculated seasonal factors for 2010.

All Items

2010 Former Recalculated Difference

January .2 .1 -.1
February .0 .0 .0
March .1 .0 -.1
April -.1 .0 .1
May -.2 -.1 .1
June -.1 -.2 -.1
July .3 .3 .0
August .3 .2 -.1
September .1 .2 .1
October .2 .2 .0
November .1 .1 .0
December .5 .4 -.1

All Items less food and energy

2010 Former Recalculated Difference

January -.1 -.1 .0
February .1 .1 .0
March .0 .0 .0
April .0 .0 .0
May .1 .1 .0
June .2 .1 -.1
July .1 .1 .0
August .0 .1 .1
September .0 .0 .0
October .0 .0 .0
November .1 .1 .0
December .1 .1 .0

C-CPI-U Index Revisions

As scheduled, effective with release of data for January 2011, the
Chained Consumer Price Index for All Urban Consumers (C-CPI-U) has
undergone its annual revision. Because the current expenditure data
required for the calculation of the C-CPI-U are available only with a
time lag, the index is issued first in preliminary form, using the
latest available expenditure data at the time of publication, and is
subject to two subsequent revisions. Therefore, C-CPI-U indexes for
the 12 months of 2009 will be issued in final form – employing
monthly expenditure weights from 2009. Values for the 12 months of
2010 will be revised and issued as interim, using expenditure weights
from the 2007-2008 period. Calculation of the initial value of the
January 2011 C-CPI-U index, and all subsequent months in 2011, will
also be based upon 2007-2008 expenditure weights.

For more information on the C-CPI-U, contact Rob Cage by telephone at
(202) 691-6959 or by electronic mail at Cage.Rob@bls.gov .

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
0.003×100
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.