Washington, DC…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 increased 7.5 percent before seasonal adjustment. Increases in the indexes for food, electricity, and shelter were the largest contributors to the seasonally adjusted all items increase. The food index rose 0.9 percent in January following a 0.5-percent increase in December. The energy index also increased 0.9 percent over the month, with an increase in the electricity index being partially offset by declines in the gasoline index and the natural gas index.

The index for all items less food and energy rose 0.6 percent in January, the
same increase as in December. This was the seventh time in the last 10 months
it has increased at least 0.5 percent. Along with the index for shelter, the
indexes for household furnishings and operations, used cars and trucks, medical
care, and apparel were among many indexes that increased over the month.

The all items index rose 7.5 percent for the 12 months ending January, the
largest 12-month increase since the period ending February 1982. The all items
less food and energy index rose 6.0 percent, the largest 12-month change since
the period ending August 1982. The energy index rose 27.0 percent over the last
year, and the food index increased 7.0 percent.

Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city
average

Seasonally adjusted changes from
preceding month
Un-
adjusted
12-mos.
July Aug. Sep. Oct. Nov. Dec. Jan. ended
2021 2021 2021 2021 2021 2021 2022 Jan.
2022

All items……………… .5 .3 .4 .9 .7 .6 .6 7.5
Food…………………. .7 .4 .9 .9 .8 .5 .9 7.0
Food at home…………. .6 .4 1.2 .9 .9 .4 1.0 7.4
Food away from home (1).. .8 .4 .5 .8 .6 .6 .7 6.4
Energy……………….. 1.6 1.9 1.2 3.7 2.4 .9 .9 27.0
Energy commodities……. 2.4 2.5 1.2 4.7 4.2 1.3 -.6 39.9
Gasoline (all types)…. 2.5 2.5 1.1 4.6 4.5 1.3 -.8 40.0
Fuel oil (1)………… .6 -2.1 3.9 12.3 3.5 -2.4 9.5 46.5
Energy services………. .7 1.2 1.2 2.4 .2 .3 2.9 13.6
Electricity…………. .2 1.0 .6 1.4 .2 .5 4.2 10.7
Utility (piped) gas
service………….. 2.2 1.6 2.9 5.9 .3 -.3 -.5 23.9
All items less food and
energy…………….. .3 .2 .3 .6 .5 .6 .6 6.0
Commodities less food and
energy commodities…. .4 .4 .3 1.1 .9 1.2 1.0 11.7
New vehicles………… 1.5 1.2 1.3 1.3 1.2 1.2 .0 12.2
Used cars and trucks…. .0 -1.2 -.5 2.5 2.4 3.3 1.5 40.5
Apparel…………….. .1 .3 -.7 .6 .7 1.1 1.1 5.3
Medical care
commodities (1)…… .2 -.2 .3 .6 .1 .0 .9 1.4
Services less energy
services………….. .3 .1 .2 .4 .4 .3 .4 4.1
Shelter…………….. .4 .2 .4 .5 .5 .4 .3 4.4
Transportation services -.9 -1.2 -1.0 .2 .7 .0 1.0 5.6
Medical care services… .2 .2 .2 .4 .3 .3 .6 2.7

1 Not seasonally adjusted.

Food

The food index increased 0.9 percent in January. The food at home index increased
1.0 percent over the month after rising 0.4 percent in December. Five of the six
major grocery store food group indexes increased in January. The index for cereals
and bakery products increased the most, rising 1.8 percent over the month. The
index for other food at home increased 1.6 percent in January, while the index
for dairy and related products rose 1.1 percent. The fruits and vegetables index
rose 0.9 percent over the month, and the meats, poultry, fish, and eggs index
increased 0.3 percent. The only grocery store group index not to increase in
January was the index for nonalcoholic beverages, which was unchanged.

The food away from home index rose 0.7 percent in January following an increase
of 0.6 percent in December. The index for full service meals and the index for
limited service meals both also rose 0.7 percent over the month.

The food at home index rose 7.4 percent over the last 12 months. All of the six
major grocery store food group indexes increased over the period. By far the
largest increase was that of the index for meats, poultry, fish, and eggs, which
rose 12.2 percent over the year. The index for dairy and related products
increased 3.1 percent, the smallest 12-month increase among the groups.

The index for food away from home rose 6.4 percent over the last year, the largest
12-month increase since January 1982. The index for limited service meals rose 8.0
percent over the last 12 months, and the index for full service meals rose 7.1
percent. The index for food at employee sites and schools, in contrast, declined
46.9 percent over the past 12 months, reflecting widespread free lunch programs.

Energy

The energy index increased 0.9 percent in January. The electricity index rose
sharply in January, increasing 4.2 percent. The gasoline index fell 0.8 percent
in January after rising rapidly in the autumn of 2021. (Before seasonal adjustment,
gasoline prices rose 0.1 percent in January.) The index for natural gas also
declined in January, falling 0.5 percent after declining 0.3 percent in December.

The energy index rose 27.0 percent over the past 12 months with all major energy
component indexes increasing. The gasoline index rose 40.0 percent over the last
year, despite declining in January. The index for natural gas rose 23.9 percent
over the last 12 months, and the index for electricity rose 10.7 percent.

All items less food and energy

The index for all items less food and energy rose 0.6 percent in January, the
same increase as December. The shelter index increased 0.3 percent in January as
the rent index increased 0.5 percent and the owners’ equivalent rent index rose
0.4 percent. The index for household furnishings and operations rose 1.3 percent
over the month following a 1.1-percent increase in December. The used cars and
trucks index rose 1.5 percent in January, a deceleration from the 3.3-percent
increase reported in December.

The medical care index rose 0.7 percent in January. The index for hospital
services increased 0.5 percent and the index for prescription drugs rose 1.3
percent, while the index for physicians’ services declined 0.1 percent. Other
indexes that rose in January include recreation (+0.9 percent), apparel (+1.1
percent), personal care (+1.0 percent), airline fares (+2.3 percent), and
education (+0.2 percent).

Only a few indexes decreased in January; among those that did were lodging away
from home (-3.9 percent) and wireless telephone services (-0.1 percent). The
index for new vehicles was unchanged over the month.

The index for all items less food and energy rose 6.0 percent over the past 12
months. Major contributors to this increase include shelter (+4.4 percent) and
used cars and trucks (+40.5 percent). However, the increase is broad-based, with
virtually all component indexes showing increases over the past 12 months.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 7.5 percent
over the last 12 months to an index level of 281.148 (1982-84=100). For the month,
the index increased 0.8 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
increased 8.2 percent over the last 12 months to an index level of 276.296
(1982-84=100). For the month, the index rose 0.9 percent prior to seasonal
adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 7.1
percent over the last 12 months. For the month, the index increased 0.8 percent
on a not seasonally adjusted basis. Please note that the indexes for the past 10
to 12 months are subject to revision.
_______________
The Consumer Price Index for February 2022 is scheduled to be released on Thursday,
March 10, 2022 at 8:30 a.m. (ET).

Technical Note

Brief Explanation of the CPI

The Consumer Price Index (CPI) measures the change in prices paid by consumers for
goods and services. The CPI reflects spending patterns for each of two population
groups: all urban consumers and urban wage earners and clerical workers. The all
urban consumer group represents about 93 percent of the total U.S. population. It
is based on the expenditures of almost all residents of urban or metropolitan
areas, including professionals, the self-employed, the poor, the unemployed, and
retired people, as well as urban wage earners and clerical workers. Not included
in the CPI are the spending patterns of people living in rural nonmetropolitan
areas, farming families, people in the Armed Forces, and those in institutions,
such as prisons and mental hospitals. Consumer inflation for all urban consumers
is measured by two indexes, namely, the Consumer Price Index for All Urban Consumers
(CPI-U) and the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is
based on the expenditures of households included in the CPI-U definition that meet
two requirements: more than one-half of the household’s income must come from
clerical or wage occupations, and at least one of the household’s earners must
have been employed for at least 37 weeks during the previous 12 months. The CPI-W
population represents about 29 percent of the total U.S. population and is a subset
of the CPI-U population.

The CPIs are based on prices of food, clothing, shelter, fuels, transportation,
doctors’ and dentists’ services, drugs, and other goods and services that people
buy for day-to-day living. Prices are collected each month in 75 urban areas across
the country from about 6,000 housing units and approximately 22,000 retail
establishments (department stores, supermarkets, hospitals, filling stations, and
other types of stores and service establishments). All taxes directly associated
with the purchase and use of items are included in the index. Prices of fuels and
a few other items are obtained every month in all 75 locations. Prices of most
other commodities and services are collected every month in the three largest
geographic areas and every other month in other areas. Prices of most goods and
services are obtained by personal visit, telephone call, or web collection by the
Bureau’s trained representatives.

In calculating the index, price changes for the various items in each location are
aggregated using weights, which represent their importance in the spending of the
appropriate population group. Local data are then combined to obtain a U.S. city
average. For the CPI-U and CPI-W, separate indexes are also published by size of
city, by region of the country, for cross-classifications of regions and population-
size classes, and for 23 selected local areas. Area indexes do not measure
differences in the level of prices among cities; they only measure the average change
in prices for each area since the base period. For the C-CPI-U, data are issued only
at the national level. The CPI-U and CPI-W are considered final when released, but the
C-CPI-U is issued in preliminary form and subject to three subsequent quarterly
revisions.

The index measures price change from a designed reference date. For most of the CPI-U
and the CPI-W, the reference base is 1982-84 equals 100. The reference base for the
C-CPI-U is December 1999 equals 100. An increase of 7 percent from the reference base,
for example, is shown as 107.000. Alternatively, that relationship can also be
expressed as the price of a base period market basket of goods and services rising
from $100 to $107.

Sampling Error in the CPI

The CPI is a statistical estimate that is subject to sampling error because it is
based upon a sample of retail prices and not the complete universe of all prices.
BLS calculates and publishes estimates of the 1-month, 2-month, 6-month, and 12-month
percent change standard errors annually for the CPI-U. These standard error estimates
can be used to construct confidence intervals for hypothesis testing. For example, the
estimated standard error of the 1-month percent change is 0.03 percent for the U.S.
all items CPI. This means that if we repeatedly sample from the universe of all retail
prices using the same methodology, and estimate a percentage change for each sample,
then 95 percent of these estimates will be within 0.06 percent of the 1-month percentage
change based on all retail prices. For example, for a 1-month change of 0.2 percent in
the all items CPI-U, we are 95 percent confident that the actual percent change based
on all retail prices would fall between 0.14 and 0.26 percent. For the latest data,
including information on how to use the estimates of standard error, see
https://www.bls.gov/cpi/tables/variance-estimates/home.htm.

Calculating Index Changes

Movements of the indexes from 1 month to another are usually expressed as percent changes
rather than changes in index points, because index point changes are affected by the
level of the index in relation to its base period, while percent changes are not. The
following table shows an example of using index values to calculate percent changes:

Item A Item B Item C
Year I 112.500 225.000 110.000
Year II 121.500 243.000 128.000
Change in index points 9.000 18.000 18.000
Percent change 9.0/112.500 x 100 = 8.0 18.0/225.000 x 100 = 8.0 18.0/110.000 x 100 = 16.4

Use of Seasonally Adjusted and Unadjusted Data

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 5 years of seasonally adjusted data. The factors are
available at www.bls.gov/cpi/tables/seasonal-adjustment/seasonal-factors-2022.xlsx. For
more information on data revision scheduling, please see the Factsheet on Seasonal Adjustment
at www.bls.gov/cpi/seasonal-adjustment/questions-and-answers.htm and the Timeline of Seasonal
Adjustment Methodological Changes at
www.bls.gov/cpi/seasonal-adjustment/timeline-seasonal-adjustment-methodology-changes.htm.

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 weather events,
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 (IASA) 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.

For example, this procedure was used for the motor fuel series to offset the effects of the 2009
return to normal pricing after the worldwide economic downturn in 2008. Retaining this outlier
data during seasonal factor calculation would distort the computation of the seasonal portion of
the time series data for motor fuel, so it was estimated and removed from the data prior to
seasonal adjustment. Following that, seasonal factors were calculated based on this “prior
adjusted” data. These seasonal factors represent a clearer picture of the seasonal pattern in
the data. The last step is for motor fuel seasonal factors to be applied to the unadjusted data.

For the seasonal factors introduced for January 2022, BLS adjusted 70 series using intervention
analysis seasonal adjustment, including selected food and beverage items, motor fuels, electricity,
and vehicles.

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 5 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 5 years of data.
Seasonally adjusted indexes beyond the last 5 years of data are considered to be final and not
subject to revision. For January 2022, revised seasonal factors and seasonally adjusted indexes
for 2017 to 2021 were calculated and published. For series which are directly adjusted using the
Census X-13ARIMA-SEATS seasonal adjustment software, the seasonal factors for 2021 will be applied
to data for 2022 to produce the seasonally adjusted 2022 indexes. Series which are indirectly
seasonally adjusted by summing seasonally adjusted component series have seasonal factors which
are derived and are therefore not available in advance.

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 5 years, but the seasonally adjusted indexes before that period will not be
changed. For 2022, 36 of the 81 components of the U.S. city average all items index are not seasonally
adjusted.