December 2010 Consumer Price Index

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The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in December on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.5 percent before seasonal adjustment.

The energy index increased in December. The gasoline index rose sharply and accounted for about 80 percent of the all items seasonally adjusted increase. The household energy index, which declined in November, increased as well. The food index increased slightly in December, with the fruits and vegetables index rising notably.

The index for all items less food and energy also rose in December. An increase in the shelter index accounted for about 60 percent of the rise, and the indexes for airline fares, medical care and apparel rose as well. These increases more than offset declines in the indexes for communication, recreation, and household furnishings and operations.

Seasonally adjusted changes from preceding month Un- adjusted 12-mos. June July Aug. Sep. Oct. Nov. Dec. ended 2010 2010 2010 2010 2010 2010 2010 Dec. 2010

Year in Review

The rate of increase in the CPI slowed in 2010 as the December to December increase fell from 2.7 percent in 2009 to 1.5 percent in 2010. A deceleration in the gasoline index accounted for much of the slowdown, as it increased 13.8 percent in 2010 after rising 53.5 percent in 2009. The index for household energy, which declined in 2009, rose 0.8 percent in 2010 as increases in the indexes for fuel oil and electricity more than offset a decline in the natural gas index. The energy index as a whole, which rose 18.2 percent in 2009, increased 7.7 percent in 2010.

The index for all items less food and energy also decelerated in 2010. After rising 1.8 percent in both 2008 and 2009, the index increased 0.8 percent in 2010, the smallest December-December increase in the history of the index. Several indexes turned down in 2010. These include the new vehicles index, which fell 0.2 percent in 2010 after rising 4.9 percent in 2009, and the index for apparel, which fell 1.1 percent in 2010 after a 1.9 percent increase in 2009. The indexes for recreation and household furnishings and operations, which both declined in 2009, posted larger decreases in 2010. The indexes for tobacco and for used cars and trucks rose in 2010, but at a slower rate than the previous year. The shelter and medical care indexes posted increases in 2010 similar to their 2009 figures. One of the few indexes to accelerate was the airline fares index, which rose 5.8 percent in 2010 after rising 4.3 percent in 2009.

The food index turned up in 2010, rising 1.5 percent after declining 0.5 percent in 2009. The index for food away from home rose 1.3 percent; the food at home index increased 1.7 percent after declining 2.4 percent in 2009. Among major grocery store food groups, the index for meats, poultry, fish and eggs posted the largest increase at 5.5 percent followed by a 3.7 percent increase in the dairy index. The indexes for nonalcoholic beverages and cereals and bakery products were the only ones to decline.

Consumer Price Index Data for December 2010

Food

The food index rose 0.1 percent in December after a 0.2 percent increase in November. The indexes for food away from home and food at home both rose 0.1 percent. Within the latter group, the fruits and vegetables index rose 1.8 percent after declining in November. The index for fresh fruits rose 3.4 percent, its fourth consecutive monthly increase. The indexes for cereals and bakery products, dairy and related products, and other food at home also increased in December. In contrast, the index for nonalcoholic beverages fell 1.3 percent in December and the index for meats, poultry, fish and eggs fell 0.4 percent.

Energy

The energy index, which rose 0.2 percent in November, increased 4.6 percent in December. The gasoline index rose 8.5 percent in December, the sixth consecutive increase. (Before seasonal adjustment, gasoline prices rose 4.5 percent in December.) The index for household energy also increased in December, rising 0.8 percent after declining 0.4 percent in November. The index for fuel oil increased 4.9 percent, and the indexes for natural gas and electricity rose 1.4 percent and 0.3 percent, respectively.

All items less food and energy

The index for all items less food and energy rose 0.1 percent in December, the same increase as last month. The index for shelter rose 0.1 percent for the third month in a row. The rent index rose 0.2 percent while the index for owners' equivalent rent increased 0.1 percent. The index for lodging away from home turned up in December, rising 1.3 percent after falling 1.2 percent in November. The index for airline fares continued to rise in December, increasing 3.3 percent after a 3.0 percent advance in November. The index for medical care rose 0.2 percent in December. The index for medical care commodities rose 0.1 percent while the index for medical care services increased 0.3 percent with the hospital services index rising 0.8 percent. The index for apparel rose 0.1 percent in December, and the tobacco index increased 0.8 percent after declining in each of the two previous months. The index for new vehicles was unchanged in December after declining in November while the used cars and trucks index fell 0.1 percent, its fourth consecutive decline. Also falling in December were the indexes for recreation (down 0.2 percent), communication (down 0.6 percent), and household furnishings and operations (down 0.1 percent).

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.5 percent over the last 12 months to an index level of 219.179 (1982-84=100). For the month, the index increased 0.2 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.7 percent over the last 12 months to an index level of 215.262 (1982-84=100). For the month, the index rose 0.2 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 0.2 percent on a not seasonally adjusted basis. Please note that the indexes for the post-2008 period are subject to revision.

Effective with the release of CPI data for January 2011 scheduled for Thursday, February 17, 2011, the following series will be re-titled: • Recreation services will become Other recreation services • Gas (piped) and electricity will become Energy services • Canned fish and seafood will become Shelf stable fish and seafood

The Recreation services index does 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, will reflect 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 will be changed in the remainder of the publication tables in January 2011 to improve consistency.

The title for Canned fish and seafood will change to Shelf stable fish and seafood to better reflect current packaging methods.

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