January 1997 Consumer Price Index

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent before seasonal adjustment in January to a level of 159.1 (1982-84=100), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. For the 12-month period ended in January, the CPI-U increased 3.0 percent.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also rose 0.3 percent in January, prior to seasonal adjustment. The January 1997 CPI-W level of 156.3 was 3.0 percent higher than the index in January 1996.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U rose 0.1 percent in January, following an increase of 0.3 percent in December. The food index, which was unchanged in December, declined 0.3 percent in January. Grocery store food prices fell 0.6 percent, reflecting in part a 2.0 percent drop in the index for fruits and vegetables. The energy index increased for the fifth consecutive month, advancing 0.8 percent in January. The index for petroleum-based energy increased 0.4 percent, and the index for energy services rose 1.4 percent. Excluding food and energy, the CPI-U rose 0.1 percent, following increases of 0.2 percent in each of the three preceding months.

The food and beverage index declined 0.2 percent in January. The index for grocery store food prices, which fell 0.1 percent in December, declined 0.6 percent in January. Each of the five major grocery store food groups, except for the index for other food at home, registered a decrease in January. The index for fruits and vegetables fell 2.0 percent in January, following a drop of 1.5 percent in December. The index for fresh fruit prices declined 5.3 percent, and the index for fresh vegetables decreased 0.1 percent. (Prior to seasonal adjustment, fresh vegetable prices rose 5.2 percent.) The index for meats, poultry, fish, and eggs decreased 0.4 percent, reflecting declines in prices for beef and eggs-- down 0.5 and 6.7 percent, respectively. The indexes for pork and for poultry each increased 0.3 percent. The index for dairy products fell 0.5 percent in January, the third consecutive month that this component failed to increase after registering increases totaling 8.5 percent in the preceding five-month period. The index for cereal and bakery products declined 0.2 percent, while the index for other food at home rose 0.1 percent. The other two components of the food and beverage index-- restaurant meals and alcoholic beverages--increased 0.3 and 0.2 percent, respectively.

The housing component rose 0.3 percent in January. Shelter costs also increased 0.3 percent. Within shelter, renters' costs rose 0.6 percent; homeowners' costs, 0.2 percent; and maintenance and repair costs were unchanged. The rise in renters' costs reflects a 1.6 percent increase in the index for lodging while out of town; residential rents rose 0.2 percent. The index for fuel and other utilities rose 0.7 percent in January. The index for household fuels increased 1.0 percent, reflecting an increase of 4.8 percent in the index for natural gas. The indexes for fuel oil and for electricity declined 0.6 and 0.2 percent, respectively. For the 10-month period ended in January, charges for natural gas have increased 15.9 percent. In January, the index for other utilities and public services rose 0.3 percent. Within this group, telephone service increased 0.3 percent, as a 2.3 percent rise in interstate toll calls more than offset a 0.2 percent drop in local telephone charges. The index for household furnishings and operation decreased 0.2 percent in January, reflecting widespread declines in housefurnishings and housekeeping services.

The transportation component declined 0.2 percent in January after increasing 0.6 percent in December, as a result of a much smaller advance in the index for motor fuels and a sharp downturn in the index for airline fares. The index for gasoline, which advanced 2.5 percent in December, rose 0.7 percent in January. (Prior to seasonal adjustment, gasoline prices were unchanged in January.) Gasoline prices have risen 15.6 percent in the last 14 months, and as of January the gasoline index was 5.4 percent below its peak level of December 1990. The index for airline fares, which increased 2.3 percent in December, fell 3.2 percent in January. The January decline reflects, in part, the lapse of the 10 percent federal tax on airline fares. Vehicle purchase costs continued to show little change in January. The index for new vehicle prices declined 0.2 percent. (Prior to seasonal adjustment, new vehicle prices were unchanged.) As of January, about 80 percent of the new vehicle sample was represented by 1997 models. The index for automobile finance charges increased 0.1 percent, following declines in each of the three preceding months. The index for used cars also turned up in January, increasing 0.1 percent.

The index for apparel and upkeep increased for the fifth consecutive month in January--up 0.4 percent after increasing 0.1 percent in December. (Prior to seasonal adjustment, clothing prices fell 0.6 percent in January, reflecting post-holiday discounting.)

Medical care costs rose 0.2 percent in January to a level 2.9 percent above a year ago. The index for medical care commodities--prescription drugs, nonprescription drugs, and medical supplies--and the index for medical care services both rose 0.2 percent. Charges for professional services and hospital and related services increased 0.4 and 0.3 percent, respectively.

Entertainment costs were unchanged on average in January. A decline in the index for entertainment commodities was offset by an increase in charges for entertainment services, the largest of which was a 1.1 percent rise in fees for participant sports.

The index for other goods and services rose 0.4 percent in January, following an increase of 0.1 percent in December. The index for personal care services--beauty parlor services and haircuts--increased 0.9 percent in January.

CPI for Urban Wage Earners and Clerical Workers (CPI-W)

On a seasonally adjusted basis, the CPI for Urban Wage Earners and Clerical Workers rose 0.1 percent in January.

After seasonal adjustment, the level of the CPI-U for All Items was 159.4 in January; the seasonally adjusted CPI-W for All Items was 156.6.

Beginning this month, BLS is reporting the level of the seasonally adjusted U.S. City Average All Items CPI-U and CPI-W in this monthly news release. Effective with the release of January 1998 data in February 1998, the seasonally adjusted All Items indexes will be fully integrated into the releases, appearing in tables 2 and 5 and in the text where relevant.

Like other seasonally adjusted CPI data, 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.

Consumer Price Index data for February are scheduled for release on Wednesday, March 19, 1997, at 8:30 A.M. (EST).

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 unadjusted for seasonal variation.

Seasonal factors used in computing the seasonally adjusted indexes are derived by the X-11-ARIMA Seasonal Adjustment Method (1988). The updated seasonal data at the end of 1977 replaced data from 1967 through 1977. Subsequent annual updates have replaced 5 years of seasonal data, e.g., data from 1992 through 1996 were replaced at the end of 1996. The seasonal movement of all items and 47 other aggregations is derived by combining the seasonal movement of 60 selected components. Each year the seasonal status of every series is reevaluated based upon certain statistical criteria. If any of the 60 components change their seasonal adjustment status from seasonally adjusted to not seasonally adjusted, not seasonally adjusted data will be used for the last 5 years, but the seasonally adjusted indexes will be used before that period.

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 fuel oil and the motor fuels indexes, this procedure was used to offset the effects that extreme price volatility would otherwise have had on the estimates of seasonally adjusted data for those series. For some women's apparel indexes and the girls' apparel index, the procedure was used to offset the effects of changes in pricing methodology. For the tobacco and smoking products index, this procedure was used to offset the effects of increases in excise taxes and wholesale tobacco prices. For some alcoholic beverage series, Intervention Analysis Seasonal Adjustment was used to offset the effects of excise tax increases. For the nonalcoholic beverages index, the procedure was used to offset the effects of a large increase in coffee prices due to adverse weather. For the water and sewerage maintenance index, the procedure was used to account for a data collection anomaly.

A description of Intervention Analysis Seasonal Adjustment, as well as a list of unusual events modeled and seasonal factors for these items, may be obtained by writing the Bureau of Labor Statistics, Division of Consumer Prices and Price Indexes, Washington, DC 20212 or by calling Claire McAnaw Gallagher on (202) 606-6968. 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 1996.

All Items

1996 Former Recalculated Difference

All Items less food and energy

1996 Former Recalculated Difference