Transmission of material in this release is embargoed until
8:30 a.m. (ET) January 13, 2021 USDL-21-0024
Technical information: (202) 691-7000 • cpi_info@bls.gov • www.bls.gov/cpi
Media Contact: (202) 691-5902 • PressOffice@bls.gov
CONSUMER PRICE INDEX – DECEMBER 2020
(NOTE: This news release was reissued January 19, 2021, correcting 29 seasonally
adjusted CPI-U special relative series in tables 2 and 6. Additional
information is available at www.bls.gov/errata/home.htm?errataID=82899.)
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent
in December on a seasonally adjusted basis after rising 0.2 percent in November,
the U.S. Bureau of Labor Statistics reported today. Over the last 12 months,
the all items index increased 1.4 percent before seasonal adjustment.
The seasonally adjusted increase in the all items index was driven by an
8.4-percent increase in the gasoline index, which accounted for more than 60
percent of the overall increase. The other components of the energy index were
mixed, resulting in an increase of 4.0 percent for the month. The food index
rose in December, as both the food at home and the food away from home indexes
increased 0.4 percent.
The index for all items less food and energy increased 0.1 percent in December
after rising 0.2 percent in the previous month. The indexes for apparel, motor
vehicle insurance, new vehicles, personal care, and household furnishings and
operations all rose in December. The indexes for used cars and trucks,
recreation, and medical care were among those to decline over the month.
The all items index rose 1.4 percent for the 12 months ending December, a
slightly larger increase than the 1.2-percent rise reported for the period
ending November. The index for all items less food and energy rose 1.6 percent
over the last 12 months, as it did in the periods ending October and November.
The food index rose 3.9 percent over the last 12 months, while the energy
index fell 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.
June July Aug. Sep. Oct. Nov. Dec. ended
2020 2020 2020 2020 2020 2020 2020 Dec.
2020
All items.................. .6 .6 .4 .2 .0 .2 .4 1.4
Food...................... .6 -.4 .1 .0 .2 -.1 .4 3.9
Food at home............. .7 -1.1 -.1 -.4 .1 -.3 .4 3.9
Food away from home (1).. .5 .5 .3 .6 .3 .1 .4 3.9
Energy.................... 5.1 2.5 .9 .8 .1 .4 4.0 -7.0
Energy commodities....... 11.7 5.3 2.0 -.1 -.5 -.2 8.2 -15.2
Gasoline (all types).... 12.3 5.6 2.0 .1 -.5 -.4 8.4 -15.2
Fuel oil................ 10.2 4.3 3.9 -5.3 -.3 3.6 10.0 -20.0
Energy services.......... -.2 .0 -.2 1.6 .8 1.1 .1 2.6
Electricity............. -.3 .3 -.2 .9 1.2 .5 .4 2.2
Utility (piped) gas
service.............. .0 -1.0 -.2 4.2 -.7 3.1 -.8 4.1
All items less food and
energy................. .2 .6 .4 .2 .0 .2 .1 1.6
Commodities less food and
energy commodities.... .2 .7 1.0 .8 -.2 .1 .2 1.7
New vehicles............ .0 .8 .0 .3 .4 -.1 .4 2.0
Used cars and trucks.... -1.2 2.3 5.4 6.7 -.1 -1.3 -1.2 10.0
Apparel................. 1.7 1.1 .6 -.5 -1.2 .9 1.4 -3.9
Medical care commodities .2 .0 -.1 .0 -.8 -.3 -.4 -2.5
Services less energy
services.............. .3 .6 .2 .0 .1 .2 .1 1.6
Shelter................. .1 .2 .1 .1 .1 .1 .1 1.8
Transportation services 2.1 3.6 .0 -.9 .1 1.8 -.1 -3.5
Medical care services... .5 .5 .1 .0 -.3 -.1 -.1 2.8
1 Not seasonally adjusted.
Food
The food index increased 0.4 percent in December following a 0.1-percent decrease
in November. The index for food at home increased 0.4 percent after declining in
November. Major grocery store food group indexes were mixed over the month. The
index for other food at home rose 0.7 percent in December after falling 0.6 percent
in November. The nonalcoholic beverages index increased 1.1 percent after a 0.9-
percent decline in the previous month. The index for dairy and related products
rose 0.8 percent in December, and the index for cereals and bakery products
increased 0.4 percent over the month.
The index for meats, poultry, fish, and eggs declined 0.2 percent in December,
following a 0.1-percent increase the previous month. The index for fruits and
vegetables also declined 0.2 percent over the month.
The index for food away from home rose 0.4 percent in December, after rising
0.1 percent in November. The index for limited service meals rose 0.5 percent,
while the index for full service meals increased 0.3 percent.
The food at home index increased 3.9 percent over the past 12 months. All six
major grocery store food group indexes increased over the period. The largest
increase was the meats, poultry, fish, and eggs index which rose 4.6 percent
as the beef index increased 5.3 percent. The smallest increases were for the
cereals and bakery products and the fruits and vegetables indexes, which both
increased 3.2 percent over the last 12 months. The index for food away from home
rose 3.9 percent over the last year. The index for limited service meals rose
6.0 percent and the index for full service meals rose 3.0 percent over the span.
Energy
The energy index rose for the seventh month in a row in December, increasing
4.0 percent. The largest contribution to this increase was the gasoline index,
which increased 8.4 percent in December after declining in the previous 2 months.
(Before seasonal adjustment, gasoline prices rose 3.4 percent in December.)
The index for electricity rose 0.4 percent over the month, while the index for
natural gas fell 0.8 percent.
Despite the monthly increase, the energy index fell 7.0 percent over the past
12 months. Energy commodity indexes fell sharply over the period, with the fuel
oil index declining 20.0 percent and the gasoline index decreasing 15.2 percent.
Energy service indexes rose over the last 12 months, with the index for natural
gas increasing 4.1 percent and the index for electricity rising 2.2 percent.
All items less food and energy
The index for all items less food and energy rose 0.1 percent in December after
rising 0.2 percent in November. The shelter index rose 0.1 percent in December,
the fifth 0.1-percent increase in a row for that index. The indexes for rent
and owners’ equivalent rent both increased 0.1 percent in December, after both
were unchanged in November. The index for lodging away from home was unchanged
in December after rising sharply in November.
The index for apparel increased 1.4 percent in December, as did the index for
motor vehicle insurance. The index for personal care and the index for new
vehicles both rose 0.4 percent over the month after falling 0.1 percent the
previous month. The index for household furnishings and operations increased
0.2 percent in December after rising 0.7 percent in November.
The index for used cars and trucks declined for the third consecutive month,
falling 1.2 percent in December. The recreation index fell 0.3 percent in
December, ending a string of 4 consecutive monthly increases. The index for
medical care continued to decline in December, falling 0.2 percent after
decreasing 0.1 percent in November. The index for prescription drugs declined
0.4 percent over the month, while the index for hospital services rose 0.3
percent in December, and the index for physicians’ services was unchanged.
The index for all items less food and energy rose 1.6 percent over the past 12
months. The shelter index rose 1.8 percent over the last 12 months. The used
cars and trucks index increased 10.0 percent over the last 12 months and the
medical care index increased 1.8 percent. Indexes which declined over the past
12 months included the indexes for airline fares, apparel, lodging away from
home, and motor vehicle insurance.
Not seasonally adjusted CPI measures
The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.4 percent
over the last 12 months to an index level of 260.474 (1982-84=100). For the
month, the index increased 0.1 percent prior to seasonal adjustment.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
increased 1.4 percent over the last 12 months to an index level of 254.081
(1982-84=100). For the month, the index rose 0.1 percent prior to seasonal
adjustment.
The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased
1.2 percent over the last 12 months. For the month, the index increased 0.1
percent on a not seasonally adjusted basis. Please note that the indexes for
the past 10 to 12 months are subject to revision.
Year in Review (December to December)
The all items CPI-U rose 1.4 percent in 2020. This was smaller than the 2019
increase of 2.3 percent and the smallest December-to-December increase since
the 0.7-percent rise in 2015. The index rose at a 1.7-percent average annual
rate over the last 10 years.
The food index increased 3.9 percent in 2020, a larger increase than the 2019
rise of 1.8 percent. The index for food at home also increased 3.9 percent in
2020, a larger increase than the 0.7-percent increase reported for 2019. Over
the last 10 years, the food index rose at a 2.0-percent average annual rate,
and the food at home index increased at a 1.5-percent average annual rate.
All six major grocery store food group indexes rose in 2020. The index for
meats, poultry, fish, and eggs rose 4.6 percent in 2020 after rising 2.3
percent in 2019. Similarly, the dairy and related products index increased
4.4 percent in 2020 after increasing 2.4 percent in 2019. The index for
nonalcoholic beverages also increased by 4.4 percent in 2020, while the index
for other food at home rose 3.9 percent over the year. The cereals and bakery
products and the fruits and vegetables indexes both increased 3.2 percent in
2020.
The index for food away from home rose 3.9 percent in 2020, a somewhat larger
increase than the 3.1 percent increase in 2019 and the largest December-to-
December rise since 2008. The food away from home index increased at a 2.7-
percent average annual rate over the last 10 years.
The energy index decreased 7.0 percent in 2020 after increasing 3.4 percent
in 2019. The index for gasoline fell 15.2 percent in 2020 after rising 7.9
percent the previous year. The index for fuel oil fell 20.0 percent in 2020.
These declines more than offset increases in the other energy component indexes.
The index for natural gas rose 4.1 percent in 2020 after falling 3.5 percent
in 2019, while the index for electricity increased 2.2 percent over the year
after declining 0.4 percent in the previous year. The energy index decreased
at a 0.9-percent average annual rate since December 2010.
The index for all items less food and energy rose 1.6 percent in 2020, a
smaller increase than the 2.3- percent increase reported for 2019, and smaller
than the 2.0-percent average annual rate over the past 10 years. The shelter
index rose 1.8 percent, the smallest December-to-December increase since 2010.
The index for rent increased 2.3 percent in 2020, while the index for owners’
equivalent rent increased 2.2 percent. The index for household furnishings and
operations increased 3.2 percent in 2020 after increasing 1.0 percent in 2019.
In contrast, the index for lodging away from home fell 9.5 percent in 2020,
the largest December-to-December decrease ever reported for that index, which
dates to December 1997.
The medical care index increased 1.8 percent in 2020, a smaller increase than
the 4.6-percent increase reported for 2019. The index for hospital services
rose 3.0 percent in 2020, the same increase as in 2019. The physicians’
services index rose 1.7 percent over the year. The index for prescription
drugs, in contrast, fell 2.4 percent in 2020 after rising 3.0 percent in 2019.
The medical care index increased at a 2.8-percent average annual rate over
the last decade.
The index for used cars and trucks increased 10.0 percent in 2020, the largest
December-to-December increase reported for that index since 1983. The new
vehicles index rose 2.0 percent in 2020 after rising 0.1 percent in 2019. The
index for motor vehicle insurance fell 4.8 percent over the year after being
unchanged in 2019, the largest December-to-December decrease in that index
since 1955.
The communication index increased 2.4 percent in 2020, a larger increase than
the 0.7-percent increase reported in 2019. The index for education increased
1.4 percent over the year, less than the 2.1-percent increase in the previous
year. The personal care index increased 1.8 percent in 2020, while the
recreation index increased 0.9 percent. The index for tobacco increased 5.1
percent over the year, and the index for alcoholic beverages increased 2.8
percent. The index for airline fares declined 18.4 percent in 2020, the largest
December-to-December decrease ever reported for that index, which was first
published in December 1964. The apparel index continued to decline for the
seventh consecutive year, falling 3.9 percent.
_______________
The Consumer Price Index for January 2021 is scheduled to be released on
Wednesday, February 10, 2021 at 8:30 a.m. (ET).
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Coronavirus (COVID-19) Pandemic Impact on December 2020 Consumer Price Index Data
Data collection by personal visit for the Consumer Price Index (CPI) program has been suspended
since March 16, 2020. When possible, data normally collected by personal visit were collected either
online or by phone. Additionally, data collection in December was affected by the temporary closing or
limited operations of certain types of establishments. These factors resulted in an increase in the
number of prices considered temporarily unavailable and imputed. While the CPI program attempted to
collect as much data as possible, many indexes are based on smaller amounts of collected prices
than usual, and a small number of indexes that are normally published were not published this month.
Additional information is available at
www.bls.gov/covid19/effects-of-covid-19-pandemic-on-consumer-price-index.htm.
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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 visits or telephone calls
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-2020.pdf.
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 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 2020, BLS adjusted 53 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 2020, revised seasonal factors and seasonally
adjusted indexes for 2015 to 2019 were calculated and published. For series which are directly
adjusted using the Census X-13ARIMA-SEATS seasonal adjustment software, the seasonal factors
for 2019 will be applied to data for 2020 to produce the seasonally adjusted 2020 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. Twenty-eight of the 81 components
of the U.S. city average all items index are not seasonally adjusted for 2020.
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 cpi_info@bls.gov.
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 cpiseas@bls.gov.
Information from this release will be made available to sensory impaired individuals upon
request. Voice phone: 202-691-5200; Federal Relay Service: 1-800-877-8339.
United States Department of Labor
