January 2017 Consumer Price Index

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The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 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 rose 2.5 percent before seasonal adjustment.

The January increase was the largest seasonally adjusted all items increase since February 2013. A sharp rise in the gasoline index accounted for nearly half the increase, and advances in the indexes for shelter, apparel, and new vehicles also were major contributors.

The energy index increased 4.0 percent in January as the gasoline index advanced 7.8 percent and the index for natural gas also increased. The food index, which had been unchanged for 6 consecutive months, increased 0.1 percent. The food at home index was unchanged, while the index for food away from home rose 0.4 percent.

The index for all items less food and energy rose 0.3 percent in January. Most of the major component indexes increased in January, with the indexes for apparel, new vehicles, motor vehicle insurance, and airline fares all rising 0.8 percent or more. The shelter index rose 0.2 percent, a smaller increase than in recent months.

The all items index rose 2.5 percent for the 12 months ending January, the largest 12-month increase since March 2012. The index for all items less food and energy rose 2.3 percent over the last 12 months, and the energy index increased 10.8 percent, its largest 12-month increase since November 2011. In contrast, the food index declined 0.2 percent over the last 12 months.

Seasonally adjusted changes from preceding month Un- adjusted 12-mos. July Aug. Sep. Oct. Nov. Dec. Jan. ended 2016 2016 2016 2016 2016 2016 2017 Jan. 2017

Food

The food index rose 0.1 percent in January, its first increase since April 2016. The index for food away from home rose 0.4 percent, its largest increase since September 2015. The food at home index was unchanged in January after declining in recent months. The major grocery store food group indexes were mixed, with three increases and three declines. The index for dairy and related products increased 0.8 percent, its largest advance since May 2014. The index for meats, poultry, fish, and eggs, which had declined for 16 consecutive months, rose 0.7 percent in January as the index for eggs rose 14.3 percent. The index for other food at home also rose in January, increasing 0.2 percent.

In contrast, the index for fruits and vegetables declined in January, falling 1.7 percent as the index for fresh vegetables decreased 3.0 percent. The index for nonalcoholic beverages fell 0.3 percent, and the index for cereals and bakery products declined 0.1 percent.

The index for food at home declined 1.9 percent over the past year, largely reflecting a 4.9-percent decrease in the fruits and vegetables index. The other major grocery store food group indexes also declined over the past year, except the index for other food at home, which was unchanged. The index for food away from home rose 2.4 percent over the past year.

Energy

The energy index rose 4.0 percent in January, its fifth straight increase. The gasoline index continued to rise, increasing 7.8 percent. (Before seasonal adjustment, gasoline prices increased 5.3 percent in January.) The index for natural gas also increased, rising 1.5 percent in January. The index for electricity was unchanged for the third month in a row.

The index for energy increased 10.8 percent over the past year, with all of its major components rising. The gasoline index rose 20.3 percent, and the index for natural gas increased 10.1 percent. The electricity index rose more modestly, increasing 1.0 percent.

All items less food and energy

The index for all items less food and energy increased 0.3 percent in January. The shelter index rose 0.2 percent in January after increasing 0.3 percent in both November and December. The rent index rose 0.3 percent, and the index for owners' equivalent rent increased 0.2 percent. The apparel index rose in January, increasing 1.4 percent. The index for new vehicles rose 0.9 percent, its largest increase since November 2009. The index for motor vehicle insurance continued to rise, increasing 0.8 percent in January, and the index for airline fares rose 2.0 percent.

The medical care index also rose in January, increasing 0.2 percent. The indexes for prescription drugs and for hospital services both increased 0.3 percent. The recreation index increased 0.4 percent, the largest advance since January 2012. The index for household furnishings and operations rose 0.3 percent over the month. The alcoholic beverages index increased 0.2 percent, and the indexes for tobacco and for personal care both rose 0.1 percent. The index for education was unchanged in January, as was the index for communication. The used cars and trucks index was one of the few to decline in January, falling 0.4 percent after increasing late in 2016.

The index for all items less food and energy rose 2.3 percent over the past 12 months. The medical care index increased 3.9 percent over that span, and the shelter index rose 3.5 percent. In contrast, the indexes for used cars and trucks, airline fares, and communication all declined over the past 12 months.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.5 percent over the last 12 months to an index level of 242.839 (1982-84=100). For the month, the index rose 0.6 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 2.5 percent over the last 12 months to an index level of 236.854 (1982-84=100). For the month, the index increased 0.6 percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 2.6 percent over the last 12 months. For the month, the index rose 0.6 percent on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.

Consumer Price Index Geographic Revision for 2018

In January 2018, BLS will introduce a new geographic area sample for the Consumer Price Index (CPI). The 2018 revision utilizes the 2010 Decennial Census and incorporates an updated area sample design, changes the frequency of publication for several local area indexes, and establishes some new local area and aggregate indexes. The first indexes using the new structure will be published in February 2018. Additional information on the geographic revision is available at: www.bls.gov/cpi/georevision2018.htm.

Revised seasonally adjusted changes

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 2016.

A Note on the Use of Seasonally Adjusted and Unadjusted Data

Introduction

The Consumer Price Index (CPI) produces both unadjusted and seasonally adjusted data. Seasonally adjusted data are computed using seasonal factors derived by the X-13ARIMA-SEATS Seasonal Adjustment Method. These factors are updated each February, and the new factors are used to revise the previous five years of seasonally adjusted data. For more information on data revisions and exceptions to the usual revision schedule, please see the Fact Sheet on Seasonal Adjustment (https://www.bls.gov/cpi/cpisaqanda.htm) and the Timeline of Seasonal Adjustment Methodological Changes (https://www.bls.gov/cpi/cpiseastimeline.htm).

How to Use Seasonally Adjusted and Unadjusted Data

For analyzing short-term price trends in the economy, seasonally adjusted changes are usually preferred since they eliminate the effect of changes that normally occur at the same time and in about the same magnitude every year—such as price movements resulting from changing climatic conditions, production cycles, model changeovers, holidays, and sales. This allows data users to focus on changes that are not typical for the time of year.The unadjusted data are of primary interest to consumers concerned about the prices they actually pay. Unadjusted data are also used extensively for escalation purposes. Many collective bargaining contract agreements and pension plans, for example, tie compensation changes to the Consumer Price Index before adjustment for seasonal variation. BLS advises against the use of seasonally adjusted data in escalation agreements because seasonally adjusted series are revised annually.

Intervention Analysis

The Bureau of Labor Statistics uses Intervention Analysis Seasonal Adjustment for some CPI series. Sometimes extreme values or sharp movements can distort the underlying seasonal pattern of price change. Intervention Analysis Seasonal Adjustment is a process by which the distortions caused by such unusual events are estimated and removed from the data prior to calculation of seasonal factors. The resulting seasonal factors, which more accurately represent the seasonal pattern, are then applied to the unadjusted data.

2017 Series Adjusted Using Intervention Analysis Seasonal Adjustment

For the seasonal factors introduced in January 2017, BLS adjusted 40 series using Intervention Analysis Seasonal Adjustment, including selected food and beverage items, motor fuels and natural gas. For example, this procedure was used for the Motor fuel series to offset the effects of events such as such as the 2009 return to normal pricing after the worldwide economic downturn in 2008.

Revision of Seasonally Adjusted Indexes

Seasonally adjusted data, including the U.S. city average All items index levels, are subject to revision for up to five years after their original release. Every year, economists in the CPI calculate new seasonal factors for seasonally adjusted series and apply them to the last five years of data. Seasonally adjusted indexes beyond the last five years of data are considered to be final and not subject to revision. In January 2017, revised seasonal factors and seasonally adjusted indexes for 2012-2016 were calculated and published. For directly adjusted series, the seasonal factors for 2016 will be applied to data for 2017 to produce the seasonally adjusted 2017 indexes.

Determining Seasonal Status

Each year the seasonal status of every series is reevaluated based upon certain statistical criteria. Using these criteria, BLS economists determine whether a series should change its status: from "not seasonally adjusted" to "seasonally adjusted", or vice versa. If any of the 81 components of the U.S. city average all items index change their seasonal adjustment status from seasonally adjusted to not seasonally adjusted, not seasonally adjusted data will be used in the aggregation of the dependent series for the last five years, but the seasonally adjusted indexes before that period will not be changed. 27 of the 81 components of the U.S. city average all items index are not seasonally adjusted for 2017.

Contact Information

For additional information on seasonal adjustment in the CPI, please contact us at (202)691-6968 or cpiseas@bls.gov. If you have general questions about the CPI, please call our information staff at (202) 691-7000 or cpi_info@bls.gov.

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.