December 2009 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.

On a seasonally adjusted basis, the December Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the index increased 2.7 percent before seasonal adjustment.

The seasonally adjusted increase in the all items index was broad based, with the indexes for food, energy, and all items less food and energy all posting modest increases. Within the latter group, a sharp rise in the index for used cars and trucks was the largest contributor to the 0.1 percent increase, while the indexes for airline fares, apparel, and lodging away from home rose as well. In contrast, the indexes for rent and owners' equivalent rent were unchanged and the index for new vehicles declined.

Grocery store food indexes showed broad-based increases, leading to the food index rising 0.2 percent, its largest one-month advance in over a year. The energy index also rose 0.2 percent; this was its smallest increase in five months. The indexes for fuel oil and gasoline rose, but the electricity index was unchanged and the natural gas index declined.

Seasonally adjusted changes from preceding month Un- adjusted 12-mos. June July Aug. Sep. Oct. Nov. Dec. ended 2009 2009 2009 2009 2009 2009 2009 Dec. 2009

Year in Review

For the 12 month period ending December 2009, the CPI-U rose 2.7 percent, compared to 0.1 percent for 2008. The larger increase was primarily due to the energy index, which rose 18.2 percent during 2009 after falling 21.3 percent in 2008. The energy upturn was caused by the gasoline index, which rose 53.5 percent in 2009 after declining 43.1 percent in 2008. The household energy index, in contrast, declined 4.9 percent during 2009 with the index for natural gas falling 18.1 percent and the electricity index declining 0.5 percent. The food index, which rose 5.9 percent in 2008, fell 0.5 percent for the 12 months ending December 2009, the first December-to- December decline since 1961. The index for food away from home rose 1.9 percent while the food at home index fell 2.4 percent. Within food at home, all six major grocery food groups posted declines in 2009 after rising in 2008. The dairy and related products group declined the most, falling 7.6 percent, its largest annual decline since 1938.

The index for all items less food and energy rose 1.8 percent during 2009, the same increase as in 2008. This identical increase was the result of offsetting factors. Pushing the index higher were vehicle prices, which rose in 2009 after declining in 2008. The indexes for new vehicles rose 4.9 percent in 2009 and the index for used cars and trucks increased 9.2 percent. Additionally, the apparel index turned up in 2009, rising 1.9 percent after declining in each of the previous two years. The medical care index rose more rapidly in 2009, increasing 3.4 percent after a 2.6 percent increase the previous year, and the tobacco index increased 30.1 percent in 2009 after rising 6.3 percent in 2008. Largely offsetting these accelerations was the shelter index, which posted its smallest annual increase since its inception in 1953. It increased only 0.3 percent after increasing 1.9 percent in 2008, with the indexes for both rent and owners' equivalent rent increasing 0.7 percent. Also, the indexes for recreation and for household furnishings and operations both declined in 2009 after rising in 2008.

Consumer Price Index Data for December 2009

Food

The food index rose 0.2 percent in December after rising 0.1 percent in each of the previous two months. The food at home index increased 0.3 percent, its largest increase since October 2008. Among the major grocery store food groups, the index for meats, poultry, fish, and eggs was unchanged while the other five groups all posted increases. The index for cereals and bakery products rose 0.6 percent, while the dairy and related products index increased 0.5 percent after declining 0.7 percent in November. The indexes for fruits and vegetables and for other food at home both rose 0.3 percent while the index for nonalcoholic beverages increased 0.2 percent. The index for food away from home increased in December, rising 0.1 percent after increasing 0.2 percent in November.

Energy

The energy index, which increased 4.1 percent in November, rose 0.2 percent in December. The index for energy commodities increased 0.5 percent, with the gasoline index rising 0.2 percent after increasing 6.4 percent in November. (Before seasonal adjustment, gasoline prices declined 1.5 percent in December.) The index for household energy was unchanged in December. The fuel oil index rose 1.1 percent after a 9.0 percent increase in the previous month, but the index for natural gas fell 0.7 percent. The index for electricity, which increased 1.4 percent in November, was unchanged in December.

All items less food and energy

The index for all items less food and energy rose 0.1 percent in December after being unchanged in November. The index for used cars and trucks rose 2.5 percent in December, accounting for almost half of the increase in the all items less food and energy index. The index for airline fares also continued to rise, increasing 2.4 percent in December after advancing 3.8 percent in November. Also increasing were the apparel index, which rose 0.4 percent, and the medical care index, which rose 0.1 percent. The shelter index, which declined 0.2 percent in November, was unchanged in December. The indexes for rent and owners' equivalent rent were both unchanged after declining in November, while the index for lodging away from home rose 0.5 percent in December. The index for new vehicles declined in December, falling 0.3 percent after increasing in each of the previous three months. The recreation index also declined in December, falling 0.4 percent as televisions, sporting goods and toys were among many recreation components that posted declines.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.7 percent over the last 12 months to an index level of 215.949 (1982-84=100). For the month, the index decreased 0.2 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 3.4 percent over the last 12 months to an index level of 211.703 (1982-84=100). For the month, the index decreased 0.1 percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 2.8 percent over the last 12 months. For the month, the index declined 0.2 percent on a not seasonally adjusted basis. Please note that the indexes for the post-2007 period are subject to revision.

Item Structure and publication changes for January 2010

Effective with the release of CPI data for January 2010 scheduled for Friday, February 19, the BLS will introduce several item structure and other publication changes into the CPI.

Shelter. The expenditure weight for second homes will be moved from Lodging away from home to a new, unpriced stratum under the Owners' equivalent rent expenditure class. As such, the expenditure class index for Owners' equivalent rent will now include both primary and secondary homes, and the title of that expenditure class index will change from Owners' equivalent rent of primary residences to Owners' equivalent rent of residences. Both the expenditure class (Owners' equivalent rent of residences), and the Owners' equivalent rent of primary residence stratum within it, will be published.

Current Structure Lodging away from home Housing at school, excluding board Other lodging away from home including hotels and motels

Owners' equivalent rent of primary residence Owners' equivalent rent of primary residence*

New Structure Lodging away from home Housing at school, excluding board Other lodging away from home, including hotels and motels

Owners' equivalent rent of residences Owners' equivalent rent of primary residence Unsampled owners' equivalent rent of secondary residences*

Medical care commodities. The item structure for Medical care commodities will change:

Current Structure Medical care commodities Prescription drugs Prescription drugs Unsampled rent or repair of medical equipment* Nonprescription drugs and medical supplies Internal and respiratory OTC drugs Nonprescription medical equipment and supplies

New Structure Medical Care Commodities Medicinal drugs Prescription drugs Nonprescription drugs Medical equipment and supplies Medical equipment and supplies Unsampled rent or repair of medical equipment*

Telephone services. The item structure for telephone services will also change:

Current structure Telephone services Land-line telephone services, local charges Land-line telephone services, long distance Wireless telephone services

New structure Telephone services Wireless telephone services Land-line telephone services

Indexes that are deemed continuous will have the same reference base previously used. New index series will have a December 2009 = 100 reference base. Unpublished series are indicated with a *.

Other publication changes The index for State and local registration and license will be retitled State motor vehicle registration and license fees.

A new index for Intracity mass transit will be published. Indexes for Land-line interstate toll calls and Land-line intrastate toll calls will be discontinued.

Expenditure Weight Update

Effective with the release of the January 2010 CPI on February 19, 2010, the Bureau of Labor Statistics (BLS) will update 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 2007-08 period. The updated expenditure weights for these indexes will replace the 2005- 2006 weights that were introduced effective with the January 2008 CPI release. As originally announced by BLS in December 1998, CPI expenditure weights will continue to be updated at two-year intervals.

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