Transmission of material in this release is embargoed until 8:30 a.m. (ET) March 10, 2022 USDL-22-0415 Technical information: (202) 691-7000 • firstname.lastname@example.org • www.bls.gov/cpi Media Contact: (202) 691-5902 • PressOffice@bls.gov CONSUMER PRICE INDEX – July 2022 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8 percent in February on a seasonally adjusted basis after rising 0.6 percent in January, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 7.9 percent before seasonal adjustment. //QCT CPI Test 01192023// Increases in the indexes for gasoline, shelter, and food were the largest contributors to the seasonally adjusted all items increase. The gasoline index rose 6.6 percent in February and accounted for almost a third of the all items monthly increase; other energy component indexes were mixed. The food index rose 1.0 percent as the food at home index rose 1.4 percent; both were the largest monthly increases since April 2020. The index for all items less food and energy rose 0.5 percent in February following a 0.6-percent increase the prior month. The shelter index was by far the biggest factor in the increase, with a broad set of indexes also contributing, including those for recreation, household furnishings and operations, motor vehicle insurance, personal care, and airline fares. The all items index rose 7.9 percent for the 12 months ending February. The 12-month increase has been steadily rising and is now the largest since the period ending January 1982. The all items less food and energy index rose 6.4 percent, the largest 12-month change since the period ending August 1982. The energy index rose 25.6 percent over the last year, and the food index increased 7.9 percent, the largest 12-month increase since the period ending July 1981. 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. Aug. Sep. Oct. Nov. Dec. Jan. Feb. ended 2021 2021 2021 2021 2021 2022 2022 Feb. 2022 All items.................. .3 .4 .9 .7 .6 .6 .8 7.9 Food...................... .4 .9 .9 .8 .5 .9 1.0 7.9 Food at home............. .4 1.2 .9 .9 .4 1.0 1.4 8.6 Food away from home (1).. .4 .5 .8 .6 .6 .7 .4 6.8 Energy.................... 1.9 1.2 3.7 2.4 .9 .9 3.5 25.6 Energy commodities....... 2.5 1.2 4.7 4.2 1.3 -.6 6.7 37.9 Gasoline (all types).... 2.5 1.1 4.6 4.5 1.3 -.8 6.6 38.0 Fuel oil (1)............ -2.1 3.9 12.3 3.5 -2.4 9.5 7.7 43.6 Energy services.......... 1.2 1.2 2.4 .2 .3 2.9 -.4 12.3 Electricity............. 1.0 .6 1.4 .2 .5 4.2 -1.1 9.0 Utility (piped) gas service.............. 1.6 2.9 5.9 .3 -.3 -.5 1.5 23.8 All items less food and energy................. .2 .3 .6 .5 .6 .6 .5 6.4 Commodities less food and energy commodities.... .4 .3 1.1 .9 1.2 1.0 .4 12.3 New vehicles............ 1.2 1.3 1.3 1.2 1.2 .0 .3 12.4 Used cars and trucks.... -1.2 -.5 2.5 2.4 3.3 1.5 -.2 41.2 Apparel................. .3 -.7 .6 .7 1.1 1.1 .7 6.6 Medical care commodities (1)...... -.2 .3 .6 .1 .0 .9 .3 2.5 Services less energy services.............. .1 .2 .4 .4 .3 .4 .5 4.4 Shelter................. .2 .4 .5 .5 .4 .3 .5 4.7 Transportation services -1.2 -1.0 .2 .7 .0 1.0 1.4 6.6 Medical care services... .2 .2 .4 .3 .3 .6 .1 2.4 1 Not seasonally adjusted. Food The food index increased 1.0 percent in February as the food at home index increased 1.4 percent over the month. All six major grocery store food group indexes increased in February. The index for fruits and vegetables had the largest increase, rising 2.3 percent, its largest monthly increase since March 2010. The index for fresh fruits increased 3.7 percent over the month, and the index for fresh vegetables rose 1.3 percent. The index for dairy and related products rose 1.9 percent, its largest monthly increase since April 2011. The index for nonalcoholic beverages increased 1.6 percent in February. The index for meats, poultry, fish, and eggs increased 1.2 percent in February as all of its major component indexes increased. The index for cereals and bakery products rose 1.1 percent and the index for other food at home increased 0.8 percent over the month. The food away from home index rose 0.4 percent in February after increasing 0.7 percent in January. The index for full service meals rose 0.6 percent and the index for limited service meals increased 0.3 percent. The food at home index rose 8.6 percent over the last 12 months, the largest 12-month increase since the period ending April 1981. The index for meats, poultry, fish, and eggs increased 13.0 percent over the last year as the index for beef rose 16.2 percent. The other major grocery store food group indexes also rose over the past year, with increases ranging from 5.2 percent (dairy and related products) to 8.2 percent (other food at home). The index for food away from home rose 6.8 percent over the last year, the largest 12-month increase since December 1981. The index for limited service meals rose 8.0 percent over the last 12 months, and the index for full service meals rose 7.5 percent. The index for food at employee sites and schools, in contrast, declined 40.7 percent over the past 12 months, reflecting widespread free lunch programs. Energy The energy index rose 3.5 percent in February following a 0.9-percent increase in January. The gasoline index rose sharply in February, increasing 6.6 percent after falling 0.8 percent in January. (Before seasonal adjustment, gasoline prices rose 5.4 percent in February.) The index for natural gas increased in February, rising 1.5 percent after declining 0.5 percent in January. In contrast, the electricity index, which rose sharply in January, declined 1.1 percent in February. The energy index rose 25.6 percent over the past 12 months with all major energy component indexes increasing. The index for gasoline rose 38.0 percent over the last year and the index for natural gas rose 23.8 percent. The index for electricity rose 9.0 percent for the 12 months ending February. All items less food and energy The index for all items less food and energy rose 0.5 percent in February. The shelter index increased 0.5 percent in February and accounted for over 40 percent of the monthly increase in the all items less food and energy index. The rent index increased 0.6 percent in February and the owners’ equivalent rent index rose 0.4 percent. The index for lodging away from home rose 2.2 percent over the month after declining in January. The recreation index increased 0.7 percent in February following a 0.9-percent increase in January. The index for household furnishings and operations also continued to rise, increasing 0.6 percent in February following larger increases in recent months. The index for motor vehicle insurance rose 1.2 percent over the month after a 0.9-percent advance in January. The personal care index increased 1.2 percent in February, its largest ever monthly increase. The index for airline fares rose 5.2 percent in February, and the index for apparel increased 0.7 percent. The medical care index rose 0.2 percent in February. The index for prescription drugs rose 0.3 percent, but the indexes for hospital services and for physicians’ services both declined 0.1 percent. The index for new vehicles increased 0.3 percent in February after being unchanged the prior month. The index for used cars and trucks, which rose sharply in recent months, declined in February, falling 0.2 percent, one of the very few indexes to show a decline in February. The index for all items less food and energy rose 6.4 percent over the past 12 months, with virtually all of its major component indexes rising over the span. The shelter index rose 4.7 percent over the last 12 months, its largest 12-month increase since May 1991. Several transportation indexes showed large increases over the past year, including used cars and trucks (+41.2 percent), new vehicles (+12.4 percent), and airline fares (+12.7 percent). Not seasonally adjusted CPI measures The Consumer Price Index for All Urban Consumers (CPI-U) increased 7.9 percent over the last 12 months to an index level of 283.716 (1982-84=100). For the month, the index increased 0.9 percent prior to seasonal adjustment. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 8.6 percent over the last 12 months to an index level of 278.943 (1982-84=100). For the month, the index rose 1.0 percent prior to seasonal adjustment. The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 7.5 percent over the last 12 months. For the month, the index increased 0.9 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 March 2022 is scheduled to be released on Tuesday, April 12, 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 72 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, 22 of the 81 components of the U.S. city average all items index are seasonally adjusted. Contact Information For additional information about the CPI visit www.bls.gov/cpi or contact the CPI Information and Analysis Section at 202-691-7000 or email@example.com. For additional information on seasonal adjustment in the CPI visit www.bls.gov/cpi/seasonal-adjustment/home.htm or contact the CPI seasonal adjustment section at 202-691-6968 or firstname.lastname@example.org. If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services.