December 2004 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) decreased 0.4 percent in December, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The December level of 190.3 (1982-84=100) was 3.3 percent higher than in December 2003.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also decreased 0.4 percent in December, prior to seasonal adjustment. The December level of 186.0 was 3.4 percent higher than in December 2003.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) declined 0.4 percent in December on a not seasonally adjusted basis. The December level of 110.7 (December 1999=100) was 2.9 percent higher than in December 2003. Please note that the indexes for the post-2002 period are subject to revision.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U decreased 0.1 percent in December, following an increase of 0.2 percent in November. The index for food was unchanged in December, with the index for food at home down 0.2 percent. Energy costs fell 1.8 percent in December, following a 0.2 percent increase in November. A 3.7 percent decline in the index for petroleum-based energy more than offset a 0.4 percent increase in the index for energy services. The index for all items less food and energy increased 0.2 percent in December, the same as in each of the preceding two months.

Consumer prices rose at a seasonally adjusted annual rate (SAAR) of 3.0 percent in the fourth quarter of 2004. This followed increases in the first three quarters at annual rates of 5.1, 4.8, and 0.6 percent, respectively. For the 12 month period ended in December, the CPI rose 3.3 percent. This compares with an increase of 1.9 percent in all of 2003. In 2004, the index for energy rose 16.6 percent, its largest annual increase since an 18.1 percent rise in 1990, and accounted for about 36 percent of the overall advance in the CPI-U. The food index, which rose 3.6 percent in 2003, increased 2.7 percent in 2004. The index for food at home rose 2.4 percent in 2004, following a 4.5 percent increase in 2003. A smaller increase in the index for meats, poultry, fish, and eggs--up 1.1 percent in 2004 after increasing 11.5 percent in 2003--was largely responsible for the moderation.

Excluding food and energy, the CPI-U advanced at a 2.0 percent SAAR in the fourth quarter, following increases at rates of 2.9, 2.3, and 1.8 percent in the first three quarters of 2004. The 2.2 percent advance in 2004 compares with a 1.1 percent rise in all of 2003. Five of the seven major non-food groups, including the non-energy portions of housing and transportation, advanced more in 2004 than in 2003. In particular, the upturn in prices for new and used vehicles and a larger increase in shelter costs accounted for almost three-fourths of the acceleration in the index for all items less food and energy. The annual rates for selected groups for the last eight years are shown below.

Percentage change 12 months ended in December

The food and beverages index registered a 0.1 percent decline in December. The index for food at home declined 0.2 percent, reflecting decreases in four of the six major grocery store food groups. The index for fruits and vegetables turned down in December, declining 0.9 percent, but advanced 7.9 percent during the last 12 months. In December, the indexes for fresh fruits and for fresh vegetables declined 0.7 and 1.3 percent, respectively. (Prior to seasonal adjustment, prices for fresh fruits and for fresh vegetables each rose 1.4 percent in December.) The index for processed fruits and vegetables declined 0.5 percent in December. Price declines for cereal and bakery products, for dairy products, and for other food at home also contributed to the drop in the overall food at home index in December. Partially offsetting these declines, the indexes for meats, poultry, fish and eggs and for nonalcoholic beverages each increased 0.4 percent in December. Within the meats, poultry, fish, and eggs group, beef prices turned up in December but declined 0.9 percent during the last 12 months. During the 12 month period ended in December 2003, beef prices had increased 23.5 percent. Egg prices turned up sharply in December, but declined 19.9 percent in 2004 after increasing 30.1 percent in the preceding 12 month period. Prices for pork and for poultry declined in December, but rose 4.7 and 5.1 percent, respectively, in 2004. The other two components of the food and beverages index--food away from home and alcoholic beverages- -increased 0.2 and declined 0.1 percent, respectively, in December and rose 3.0 and 2.8 percent in 2004.

The index for housing increased 0.2 percent in December. Shelter costs, which were virtually unchanged in November, increased 0.2 percent in December. Within shelter, the indexes for rent and for owners' equivalent rent each rose 0.2 percent and the index for lodging away from home rose 0.3 percent. (Prior to seasonal adjustment, the index for lodging away from home declined 2.6 percent.) During the 12 month period ended in December, the indexes for rent and owners' equivalent rent rose 2.9 and 2.3 percent, respectively. The index for fuels and utilities increased 0.1 percent in December. Charges for natural gas and for electricity increased 1.0 and 0.1 percent, respectively, while the index for fuel oil declined 4.8 percent. During the 12 month period ended in December, charges for natural gas and for electricity rose 16.4 and 2.1 percent, respectively, and fuel oil prices increased 39.5 percent. The index for household furnishings and operations decreased 0.1 percent in December, but rose 0.6 percent during the last 12 months, its first annual increase since a 0.2 percent rise in December 2001.

The transportation index declined 0.9 percent in December, reflecting a 3.7 percent decrease in the index for gasoline. Gasoline prices fell 7.1 percent in the six-month period following the peak level reached in June 2004, but remained 26.1 percent higher than their level in December 2003. The index for new vehicles increased for the third consecutive month--up 0.3 percent in December. (As of December, about 65 percent of the new vehicle sample was represented by 2005 models. The 2005 models will continue to be phased in, with appropriate adjustments for quality change, over the next several months as they replace old models at dealerships.) New vehicle prices were 0.6 percent higher than in December 2003, their first annual increase since a 1.8 percent advance in the 12 months ended in December 1996. The index for used cars and trucks increased 0.4 percent in December, and this index has risen 4.8 percent in the last 12 months after declining 11.8 percent in all of 2003. The index for public transportation declined 1.3 percent in December, reflecting a 2.9 percent drop in airline fares. These fares fell 1.5 percent in all of 2004, their fourth consecutive annual decline.

The index for apparel declined 0.4 percent in December. (Prior to seasonal adjustment, apparel prices fell 3.4 percent, largely as a result of pre-holiday discounting.) During the 12 month period ended in December, apparel prices declined 0.2 percent, their seventh consecutive annual decline.

Medical care costs rose 0.3 percent in December. The index for medical care commodities--prescription drugs, nonprescription drugs, and medical supplies--decreased 0.3 percent, reflecting a drop in nonprescription drugs. The index for medical care services rose 0.5 percent in December. The indexes for professional services and for hospital and related services increased 0.3 and 0.8 percent, respectively. In the 12 months ended in December 2004, the index for medical care rose 4.2 percent after increasing 3.7 percent in 2003. The acceleration in 2004 reflects larger increases in the indexes for prescription drugs and professional services--up 3.5 and 4.0 percent, respectively--following increases of 2.5 and 2.8 percent in 2003. Charges for hospital and related services increased 5.2 percent in the 12 month period ended in December 2004 after advancing 6.4 percent in 2003.

The index for recreation declined 0.1 percent in December. Price increases for cable and satellite television and radio service and for pets, pet products and services were more than offset by decreases in the indexes for toys, for sporting goods, and for photography. During the 12 months ended in December, the indexes for cable and for pets increased 4.0 and 4.3 percent, respectively, while prices for toys, for sporting goods and equipment, and for photography all declined.

The index for education and communication was unchanged in December. Educational costs increased 0.5 percent, while communication costs declined 0.4 percent. During the 12 months ended in December, educational costs rose 6.5 percent, largely as a result of an 8.6 percent rise in the index for college tuition and fees. The index for communication declined 3.2 percent during the last 12 months, reflecting declines in prices for long distance telephone services and for personal computers and peripheral equipment--down 7.7 and 14.2 percent, respectively.

The index for other goods and services increased 0.5 percent in December, reflecting a 0.6 percent increase in the index for tobacco and smoking products. During the 12 months ended in December, these prices increased 3.1 percent after declining 0.4 percent in all of 2003.

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 0.1 percent in December.

Consumer Price Index data for January are scheduled for release on Wednesday, February 23, 2005, at 8:30 A.M. (EST).

Recalculated Seasonally Adjusted Indexes to be Available on February 18, 2005

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 2000 through December 2004, on Friday, February 18, 2005. This date is two working days before the scheduled release of the January 2005 CPI on Wednesday, February 23, 2005.

The revised indexes and seasonal factors will be available on the internet. The address is http://www.bls.gov/cpi. Look under Tables Created by BLS and select Revised Seasonally Adjusted Data, 2004.

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. For a recorded message of Summary CPI data, call (202) 691-5200.