Consumer Price Index News Release

Transmission of material in this release is embargoed until                                        
8:30 a.m. (ET) Tuesday, March 14, 2023         USDL-23-0484
	
Technical information: (202) 691-7000  *  cpi_info@bls.gov  *  www.bls.gov/cpi
Media contact:         (202) 691-5902  *  PressOffice@bls.gov 

CONSUMER PRICE INDEX - FEBRUARY 2023

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in February on a seasonally
adjusted basis, after increasing 0.5 percent in January, the U.S. Bureau of Labor Statistics reported
today. Over the last 12 months, the all items index increased 6.0 percent before seasonal adjustment.

The index for shelter was the largest contributor to the monthly all items increase, accounting for over
70 percent of the increase, with the indexes for food, recreation, and household furnishings and
operations also contributing. The food index increased 0.4 percent over the month with the food at home
index rising 0.3 percent. The energy index decreased 0.6 percent over the month as the natural gas and
fuel oil indexes both declined.

The index for all items less food and energy rose 0.5 percent in February, after rising 0.4 percent in
January. Categories which increased in February include shelter, recreation, household furnishings and
operations, and airline fares. The index for used cars and trucks and the index for medical care were
among those that decreased over the month.

The all items index increased 6.0 percent for the 12 months ending February; this was the smallest
12-month increase since the period ending September 2021. The all items less food and energy index rose
5.5 percent over the last 12 months, its smallest 12-month increase since December 2021. The energy
index increased 5.2 percent for the 12 months ending February, and the food index increased 9.5 percent
over the last year. 

Food

The food index increased 0.4 percent in February, and the food at home index rose 0.3 percent over the
month. Five of the six major grocery store food group indexes increased over the month. The index for
nonalcoholic beverages increased 1.0 percent in February, after a 0.4-percent increase the previous
month. The indexes for other food at home and for cereals and bakery products each rose 0.3 percent
over the month. The index for fruits and vegetables increased 0.2 percent in February, and the index
for dairy and related products rose 0.1 percent.

In contrast, the meats, poultry, fish, and eggs index fell 0.1 percent over the month, the first
decrease in that index since December 2021. The index for eggs fell 6.7 percent in February following
sharp increases in recent months.

The food away from home index rose 0.6 percent in February, as it did in January. The index for limited
service meals increased 0.7 percent over the month and the index for full service meals increased 0.6
percent. 

The food at home index rose 10.2 percent over the last 12 months. The index for cereals and bakery
products rose 14.6 percent over the 12 months ending in February. The remaining major grocery store
food groups posted increases ranging from 5.3 percent (fruits and vegetables) to 12.4 percent (other
food at home).

The index for food away from home rose 8.4 percent over the last year. The index for full service meals
rose 8.0 percent over the last 12 months, and the index for limited service meals rose 7.2 percent over
the same period. 

Energy

The energy index fell 0.6 percent in February, after increasing 2.0 percent in January. The natural gas
index decreased 8.0 percent over the month, the largest 1-month decrease in that series since October
2006. The fuel oil index fell 7.9 percent over the month, following a 1.2-percent decline in January.
In contrast, the gasoline index rose 1.0 percent in February, following a 2.4-percent increase in the
previous month. (Before seasonal adjustment, gasoline prices rose 1.7 percent in February.) The index
for electricity increased 0.5 percent over the month.

The energy index rose 5.2 percent over the past 12 months. The fuel oil index rose 9.2 percent over the
last 12 months, while the index for electricity rose 12.9 percent, and the index for natural gas
increased 14.3 percent over the same period. The gasoline index decreased 2.0 percent over the span.

All items less food and energy

The index for all items less food and energy rose 0.5 percent in February, after rising 0.4 percent in
January. The shelter index continued to increase, rising 0.8 percent over the month. The index for rent
rose 0.8 percent in February, while the index for owners' equivalent rent increased 0.7 percent over the
month. The index for lodging away from home increased 2.3 percent in February. 

The shelter index was the dominant factor in the monthly increase in the index for all items less food
and energy. Among the other indexes that rose in February was the index for recreation, which increased
0.9 percent, and the index for household furnishings and operations which increased 0.8 percent. The
airline fares index rose 6.4 percent, ending a string of four consecutive declines. The index for motor
vehicle insurance, the index for apparel, the index for personal care, and the index for new vehicles
also increased in February. In contrast, the index for used cars and trucks fell 2.8 percent in 
February, continuing a recent downward trend. 

The medical care index fell 0.5 percent in February, after falling 0.4 percent in January. The index for
physicians' services continued to decline, falling 0.5 percent after declining 0.1 percent in January.
The hospital services index and the prescription drugs index were unchanged in February. 

The index for all items less food and energy rose 5.5 percent over the past 12 months. The shelter index
increased 8.1 percent over the last year, accounting for over 60 percent of the total increase in all
items less food and energy. Other indexes with notable increases over the last year include motor
vehicle insurance (+14.5 percent), household furnishings and operations (+6.1 percent), recreation
(+5.0 percent), and new vehicles (+5.8 percent). 

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 6.0 percent over the last 12 months
to an index level of 300.840 (1982-84=100). For the month, the index increased 0.6 percent prior to
seasonal adjustment.  

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 5.8 percent over
the last 12 months to an index level of 295.057 (1982-84=100). For the month, the index increased 0.5
percent prior to seasonal adjustment.  

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 6.2 percent over the last
12 months. For the month, the index increased 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. 
_______________
The Consumer Price Index for March 2023 is scheduled to be released on Wednesday, April 12, 2023, 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 over 90 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 approximately 30 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
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) program 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-2023.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. 

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 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 2023, BLS adjusted 57 series using intervention
analysis seasonal adjustment, including selected food and beverage items, motor fuels 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 2023, revised seasonal factors and seasonally adjusted indexes for 2018 to 
2022 were calculated and published. For series which are directly adjusted using the Census 
X-13ARIMA-SEATS seasonal adjustment software, the seasonal factors for 2022 will be applied to data
for 2023 to produce the seasonally adjusted 2023 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 2023, 37 of the 81 components of the U.S. city average all items index are not 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 cpi_info@bls.gov. 

For additional information on seasonal adjustment in the CPI visit 
www.bls.gov/cpi/seasonal-adjustment/home.htm

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