January 2015 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) declined 0.7 percent in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index decreased 0.1 percent before seasonal adjustment.

The energy index fell 9.7 percent as the gasoline index fell 18.7 percent in January, the sharpest in a series of seven consecutive declines. The gasoline decrease was overwhelmingly the cause of the decline in the all items index, which would have risen 0.1 percent had the gasoline index been unchanged. The fuel oil index also fell sharply, and the index for natural gas turned down, although the electricity index rose. The food index was unchanged in January, with the food at home index falling for the first time since May 2013.

The index for all items less food and energy rose 0.2 percent in January. The shelter index rose 0.3 percent, and the indexes for personal care, for apparel, and for recreation increased as well. The medical care index was unchanged, while an array of indexes declined in January, including those for household furnishings and operations, alcoholic beverages, new vehicles, used cars and trucks, airline fares, and tobacco.

The all items index declined 0.1 percent over the last 12 months, the first negative 12-month change since the period ending October 2009. The energy index fell 19.6 percent over the span, with the gasoline index down 35.4 percent. The food index rose 3.2 percent, and the index for all items less food and energy increased 1.6 percent.

Seasonally adjusted changes from preceding month Un- adjusted 12-mos. July Aug. Sep. Oct. Nov. Dec. Jan. ended 2014 2014 2014 2014 2014 2014 2015 Jan. 2015

Consumer Price Index Data for January 2015

Food

The food index was unchanged in January after rising through all of 2014. The index for food at home turned down in January, falling 0.2 percent after increasing in each of the last 6 months. Four of the six major grocery store food groups declined in January. The fruits and vegetables index fell 0.9 percent, with the indexes for fresh fruits and fresh vegetables both declining. The dairy and related products index also fell 0.9 percent, its largest decline since April 2012. The index for meats, poultry, fish, and eggs fell slightly in January, decreasing 0.1 percent despite the index for beef and veal rising 0.1 percent. The index for other food at home, which rose in November and December, also declined 0.1 percent in January. The food at home index has increased 3.3 percent over the last 12 months, with all six major grocery store food group indexes rising over that span. The largest increase was posted by the meats, poultry, fish, and eggs group, which rose 8.7 percent with the beef and veal index increasing 19.0 percent. The index for food away from home increased 0.2 percent in January after a 0.3-percent increase in December and has risen 3.1 percent over the last 12 months.

Energy

The energy index fell 9.7 percent in January, its seventh consecutive decline and the largest 1-month decrease since November 2008. The 18.7-percent decline in the gasoline index was the main factor. (Before seasonal adjustment, gasoline prices fell 17.1 percent in January.) The fuel oil index also fell sharply, declining 9.9 percent after a 7.8-percent decline in December. The index for natural gas, which rose in December, fell 3.4 percent in January. The electricity index was the only major energy component to increase, rising 0.9 percent, its largest increase since May 2014. The electricity index is also the only major energy component to rise over the last 12 months, increasing 2.5 percent over the span. The gasoline and fuel oil indexes have declined sharply over the period, falling 35.4 percent and 29.7 percent, respectively. The index for natural gas has declined slightly over the span, decreasing 0.4 percent.

All items less food and energy

The index for all items less food and energy increased 0.2 percent in January. The shelter index increased 0.3 percent, with the rent and owners' equivalent rent indexes both rising 0.2 percent and the index for lodging away from home rising 1.3 percent. The personal care index rose 0.6 percent in January, its largest increase since the inception of the index in 1999. The apparel index rose 0.3 percent, and the recreation index increased 0.2 percent. The index for medical care was unchanged in January, with the index for medical care services rising, but the medical care commodities index falling. Several indexes posted modest declines in January. The index for household furnishings and operations fell 0.2 percent, and the indexes for new vehicles and for used cars and trucks both fell 0.1 percent. The index for alcoholic beverages fell 0.3 percent, as did the index for airline fares. The tobacco index also declined, falling 0.2 percent after rising in December.

The index for all items less food and energy has risen 1.6 percent over the past 12 months, the same figure as for the 12 months ending December. The index for shelter has risen 2.9 percent over the span, and the indexes for medical care, for new vehicles, and for alcoholic beverages are among those that have also increased. Indexes that have declined over the past year include those for used cars and trucks, airline fares, household furnishings and operations, and apparel.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.1 percent over the last 12 months to an index level of 233.707 (1982-84=100). For the month, the index fell 0.5 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) decreased 0.8 percent over the last 12 months to an index level of 228.294 (1982-84=100). For the month, the index fell 0.7 percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) decreased 0.6 percent over the last 12 months. For the month, the index fell 0.7 percent on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.

Chained Consumer Price Index to be Revised Quarterly

Effective with this release of CPI data for January 2015 on February 26, 2015, the Bureau of Labor Statistics is beginning quarterly revisions of the Chained Consumer Price Index for All Urban Consumers (C-CPI-U). In addition, a Constant Elasticity of Substitution (CES) formula will replace the geometric mean formula for the calculation of Initial and Interim C-CPI-U indexes.

More frequent weight updates and index revisions. Whereas CPI-U and CPI-W indexes are considered final when released, the final C-CPI-U index is published with a lag for administration and processing of Consumer Expenditure Survey household data, the source of the final C-CPI-U monthly expenditure weights. Under the traditional annual revision process, the final C-CPI-U index was published 13 to 24 months after the CPI-U. The CPI program is implementing a new estimation system that calculates monthly expenditure weights and revised C-CPI-U indexes on a quarterly basis. Under the new quarterly process, the final C-CPI-U index will lag the CPI-U index by 10 to 12 months.

Final C-CPI-U indexes for 2014 will be published on the following quarterly schedule:

Index Month Release Month January 2013 - March 2014 February 2015 April - June 2014 May 2015 July - September 2014 August 2015 October - December 2014 November 2015

Initial C-CPI-U indexes will continue to be released concurrent with the CPI-U release, and will be updated as interim C-CPI-U indexes with every quarterly revision until the final version is published.

New formula for initial and interim C-CPI-U Indexes. The CES formula will replace the geometric mean formula for initial and interim C-CPI-U indexes effective with this February 26, 2015 release. The CES formula is an improvement over the geometric mean formula because the CES formula more closely models consumer substitution behavior.

With the use of the geometric mean formula, consumers are assumed to consistently substitute within item classification to goods whose prices are falling relative to others. Using a fixed quantity formula, such as a Laspeyres formula, consumers are assumed to make no substitutions between goods when faced with relative price change. In reality, consumers respond to relative price changes differently than either model implies. The CES formula attempts to capture the amount of substitution occurring in the marketplace as consumers respond to changing relative prices.

For further details on the implementation of the CES formula and the frequency of weight updates for the C-CPI-U, please contact the CPI Information and Analysis section at (202) 691-6966.

New Estimation System

Effective with this release of the January 2015 CPI on February 26, 2015, the Bureau of Labor Statistics is utilizing a new estimation system for the Consumer Price Index. The new estimation system, the first major improvement to the existing system in over 25 years, is a redesigned, state-of-the-art system with improved flexibility and review capabilities. For more information on this new system, please see http://www.bls.gov/cpi/cpinewest.htm.

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.