January 2006 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 0.8 percent in January, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The January level of 198.3 (1982-84=100) was 4.0 percent higher than in January 2005.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also increased 0.8 percent in January, prior to seasonal adjustment. The January level of 194.0 (1982-84=100) was 4.1 percent higher than in January 2005.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.7 percent in January on a not seasonally adjusted basis. The January level of 115.2 (December 1999=100) was 3.4 percent higher than in January 2005. Please note that the indexes for the post-2004 period are subject to revision. Previously published and revised data for 2004 and 2005 are shown on page 5.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U advanced 0.7 percent in January, following declines in each of the previous two months. Energy costs increased 5.0 percent in January, its first advance since September and accounted for about 70 percent of the advance in the overall CPI-U. Within energy, the index for petroleum-based energy increased 5.7 percent and the index for energy services rose 4.2 percent. The food index rose 0.5 percent in January after increasing 0.1 percent in December. Increases in fresh fruit and vegetable prices accounted for more than half of the 0.5 percent rise in the index for food at home. The index for all items less food and energy increased 0.2 percent in January, following a 0.1 percent increase in December, reflecting upturns in the indexes for new vehicles and for apparel.

Effective with this month's release the CPI expenditure weights have been updated to 2003-04. See page 4 for notes on changes introduced into the CPI in 2006.

The food and beverages index rose 0.5 percent in January. The index for food at home also rose 0.5 percent, following a 0.1 percent increase in December. Each of the six major grocery store food groups contributed to the acceleration in January. The index for fruits and vegetables registered the largest advance--up 1.7 percent, following a 0.7 percent rise in December. The indexes for fresh fruits and for fresh vegetables increased 2.7 and 2.1 percent, respectively, while the index for processed fruits and vegetables decreased 0.7 percent. The indexes for cereal and bakery products and for dairy products, each of which declined in December, rose 0.5 percent in January. The index for other food at home also rose 0.5 percent, reflecting large increases in the indexes for fats and oils and for spices, seasonings, condiments, and sauces. The index for nonalcoholic beverages also turned up in January, reflecting price increases for carbonated and noncarbonated juices and drinks. The index for meats, poultry, fish, and eggs, which was unchanged in December, increased 0.1 percent in January. Price increases for beef, for fish and seafood, and for eggs--up 0.6, 0.9, and 3.6 percent, respectively--were largely offset by decreases in prices for pork, for other meats, and for poultry. The other two components of the food and beverages index--food away from home and alcoholic beverages--increased 0.3 and 0.8 percent, respectively.

The index for housing, which rose 0.2 percent in December, increased 0.5 percent in January. The index for fuels and utilities, which decreased 1.3 percent in December, increased 3.4 percent in January. The index for fuel oil declined for the fourth consecutive month--down 1.9 percent in January. This decline was more than offset by increased charges for energy services. The indexes for electricity and for natural gas each turned up in January, advancing 5.5 and 1.7 percent, respectively. The index for shelter increased 0.1 percent in January, following a 0.3 percent rise in December. Within shelter, the index for rent rose 0.1 percent; owners' equivalent rent increased 0.2 percent; and the index for lodging away from home rose 0.5 percent. (Prior to seasonal adjustment, the index for lodging away from home increased 3.8 percent.) The index for household furnishings and operations, which rose 0.5 percent in December, declined 0.3 percent in January.

The transportation index rose 1.8 percent in January. Gasoline prices, which had declined in each of the preceding three months, rose 6.4 percent in January and accounted for almost 90 percent of the January transportation advance. The index for new vehicles increased 0.6 percent in January, following declines in each of the preceding two months. (As of January, about 85 percent of the new vehicle sample was represented by 2006 models. The 2006 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.) The index for used cars and trucks increased 0.1 percent in January. The index for public transportation rose 1.3 percent in January, reflecting an upturn in airline fares. Airline fares rose 1.2 percent in January, following large declines in November and December.

The index for apparel rose 0.3 percent in January, following a 0.3 percent decline in December. (Prior to seasonal adjustment, apparel prices fell 2.2 percent, reflecting post-holiday discounting.)

Medical care costs rose 0.1 percent in January and are 4.0 percent higher than a year ago. The index for medical care commodities-- prescription drugs, nonprescription drugs, and medical supplies--increased 0.4 percent. The index for medical care services was virtually unchanged in January. A 0.3 percent decrease in the index for professional services was offset by a 0.7 percent increase in the index for hospital and related services.

The index for recreation was unchanged in January. Increases in the indexes for newspapers and magazines--up 0.8 percent--for sporting goods, for pets, pet products and services, and for club membership dues and fees for participant sports--each up 0.3 percent--were offset by declines in the indexes for video and audio, for toys, and for admissions to movies, theaters, concerts, and sporting events.

The index for education and communication rose 0.4 percent in January. Educational costs increased 0.7 percent, reflecting increases in the indexes for child care and nursery school and for college textbooks-- up 1.1 and 1.4 percent, respectively. Communication costs increased 0.2 percent as a 5.3 percent increase in postal charges more than offset a 0.9 percent decrease in the index for personal computers and peripheral equipment.

The index for other goods and services increased 0.3 percent in January, reflecting increases of 0.4 percent in the index for tobacco and smoking products and 0.2 percent in the index for personal care.

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

On a seasonally adjusted basis, the CPI for Urban Wage Earners and Clerical Workers increased 0.7 percent in January.

Consumer Price Index data for February are scheduled for release on Thursday, March 16, 2006, at 8:30 A.M. (EST).

CPI (Old Weights)

For the first six months of 2006, BLS also will calculate Old Weights CPI-U and Old Weights CPI-W based on the 2001-02 expenditure pattern used in the CPI from 2004 through 2005. These Old Weight data are contained in tables 1(OW)-4(OW). From December 2005 to January 2006, the Old Weight CPI-U rose 0.8 percent and the Old Weight CPI-W also rose 0.8 percent. Note these series are not seasonally adjusted.

Changes in the Consumer Price Index in 2006

Expenditure Weight Update

As announced, the Bureau of Labor Statistics (BLS) has updated the consumption expenditure weights in the Consumer Price Index for All Urban Consumers (CPI-U) and Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the 2003-04 period. The updated expenditure weights for these indexes replace the 2001-2002 weights that were introduced effective with the January 2004 CPI release. As originally announced by BLS in December 1998, CPI expenditure weights will continue to be updated at two-year intervals subsequent to the 2006 updating.

For the first six months of 2006, BLS will continue to calculate and publish selected CPI-U and CPI-W "overlap" indexes using the 2001-2002 expenditure pattern that was introduced into the CPI in 2004. These indexes will be compiled on a not seasonally adjusted basis. Comparison of these index series to the corresponding updated series will enable users of the CPI to observe the effects of the expenditure weight change. The subsequent expenditure updates scheduled in 2008 and every two years thereafter also will be accompanied by the publication of overlap indexes for a six-month period using the previous expenditure pattern.

Change to Published Item Structure

Effective with release of the January 2006 CPI, BLS began publishing item indexes for Health insurance and for Care of invalids and elderly at home. Note, the Health insurance index only reflects changes in the cost for individual insurance carriers of administering policies, maintaining reserves, and profits. The CPI does not directly reflect health insurance premiums for use in the index. (For details on how health insurance is treated in the CPI, see "Measuring Price Change for Medical Care in the CPI," on the CPI home page http://www.bls.gov/cpi/) These indexes are available at the U.S. City Average area level for both the CPI-U and CPI-W with a December 2005 = 100 reference base. In addition, new indexes based on substantially smaller samples will be published for the CPI-U only on a December 2005 = 100 reference base. These are: 1) Food at elementary and secondary schools, 2) Infants' furniture, and 3) Infants' equipment.

C-CPI-U Index Revisions

In accordance with the previously-announced schedule, the Bureau of Labor Statistics is revising the 2004 and 2005 values of the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), effective with the release of January 2006 data.

The C-CPI-U was introduced with release of July data on August 16, 2002. The index in its final form employs a Tornqvist formula and utilizes expenditure data in adjacent time periods in order to reflect the effect of any substitution that consumers make across item categories in response to changes in relative prices. The C-CPI-U was designed to be a closer approximation to a "cost-of-living" index than the CPI-U and CPI-W. The use of expenditure data for both a base period and a current period distinguishes the C-CPI-U from the other CPI measures, which use only a single expenditure base period to compute price change over time.

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. The preliminary values for each month of the preceding two years are revised annually with release of the January index. Expenditure data for the year 2004 are now available, and the C-CPI-U indexes for that year are now in final form. The initial indexes for 2005 are now revised interim indexes. The C-CPI-U U.S. All Items index values for 2004 and 2005 as originally published and revised are shown below.

Bureau of Labor Statistics Division of Consumer Prices and Price Indexes 2 Massachusetts Ave. NE, Room 3130 Washington, DC 20212

Or contact Patrick Jackman or Rob Cage either by telephone at (202) 691- 6952 or by electronic mail at Jackman.Patrick@bls.gov or Cage.Rob@bls.gov.

U.S. City Average C-CPI-U All Items

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 2005.

All Items

2005 Former Recalculated Difference

All Items less food and energy

2005 Former Recalculated Difference

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