The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) decreased 1.3 percent in December on a not seasonally adjusted basis. The December level of 120.661 (December 1999=100) was 0.5 percent lower than in December 2007. Please note that the indexes for the post-2006 period are subject to revision.
CPI for All Urban Consumers (CPI-U)
On a seasonally adjusted basis, the CPI-U decreased 0.7 percent in December, the third consecutive decline. The index is now only 0.1 percent higher than in December 2007. Declining energy prices, particularly for gasoline, again drove most of the decline. The energy index declined 8.3 percent in December. Within energy, the gasoline index fell 17.2 percent and accounted for almost 90 percent of the decrease in the all items index. The index for household energy declined 0.7 percent. Excluding energy, the index was virtually unchanged for the third straight month. The food index declined 0.1 percent in December, the first decrease since April 2006, as many meat, dairy, fruit, and vegetable indexes decreased. The index for all items excluding food and energy was virtually unchanged in December. Continuing decreases in the indexes for lodging away from home, airline fare, and new and used motor vehicles, along with downturns in the indexes for apparel and recreation, offset increases in other indexes including rent and owners’ equivalent rent, medical care, and education.
For the 12 month period ending December 2008, the CPI-U rose 0.1 percent. This was the smallest calendar year increase since a 0.7 percent decline in 1954 and compares with a 4.1 percent increase for the 12 months ended December 2007. Consumer prices declined at a seasonally adjusted annualized rate (SAAR) of 12.7 percent in the fourth quarter of 2008. This followed increases during the first three quarters at rates of 3.1, 7.9, and 2.6 percent, respectively. The index for energy declined at a SAAR of 76.6 percent during the fourth quarter and fell 21.3 percent for the 12 months ending December after rising 17.4 percent during 2007. Petroleum-based energy prices declined 40.5 percent during 2008 while prices for energy services rose 7.7 percent. The food index rose 5.9 percent in 2008 compared to 4.9 percent in 2007, with grocery store food prices rising 6.6 percent in 2008 compared to 5.6 percent in 2007. In both cases, the 2008 increases were the largest since 1980. Among the grocery store food groups, the 2008 increases ranged from a low of 2.7 percent for dairy and related products to a high of 11.7 percent for cereals and bakery products.
Excluding food and energy, the CPI declined at a 0.3 percent SAAR during the last quarter of 2008, after increasing at rates of 2.0, 2.5, and 2.7 percent during the first three quarters, respectively. The 1.8 percent increase for all of 2008 compares to 2.4 percent during 2007 and is the smallest one-year increase since 2003. The smaller increase reflects slower advances in prices for shelter and medical care as well as a decline in the price of new and used motor vehicles. Shelter costs rose 1.9 percent in 2008 after increasing 3.1 percent in 2007, while medical care prices rose 2.6 percent in 2008 after increasing 5.2 percent in 2007. Prices for new and used motor vehicles declined 3.5 percent during 2008 after being virtually unchanged during 2007.
The food and beverages index was virtually unchanged in December, as increases in the indexes for food away from home and alcoholic beverages offset a 0.4 percent decline in the food at home index. Within food at home, the indexes for three of the six major grocery store food groups declined. The fruits and vegetables index declined 2.4 percent in December, the fourth consecutive decrease, with fresh vegetables down 4.4 percent. The index for dairy and related products turned down in December, falling 0.9 percent after rising 0.4 percent in November. For the year, the indexes for fruits and vegetables and for dairy and related products rose 3.4 percent and 2.7 percent, respectively. The index for meats, poultry, fish and eggs declined 0.5 percent in December, but was up 5.1 percent for the year. The December decrease was driven by a 6.6 percent decline in the index for eggs. The indexes for cereals and bakery products and for other food at home both increased in December. The former index rose 0.3 percent in December and posted an 11.7 percent 12 month increase, while the latter climbed 0.6 percent and was up 9.3 percent for the year. The index for nonalcoholic beverages was virtually unchanged in December and has increased 5.9 percent since December 2007. The index for food away from home advanced 0.3 percent in December while the alcoholic beverages index increased 0.6 percent.
The index for housing was virtually unchanged in December after declining 0.1 percent in November. The shelter index, which rose 0.2 percent in November, was also virtually unchanged. Increases in the indexes for rent and owners’ equivalent rent of 0.2 percent and 0.1 percent, respectively, offset a 0.7 percent decline in the index for lodging away from home. For the 12 months ending December, the housing index rose 2.4 percent, with the index for shelter increasing 1.9 percent. The household energy index declined 0.7 percent in December, but registered a 5.9 percent increase over the last 12 months. Within household energy, the index for fuel oil declined sharply, down 12.7 percent in December and 21.0 percent over the last year. The natural gas index declined 1.6 percent but was up 5.5 percent during 2008. The electricity index increased in December, rising 0.6 percent to a level 8.6 percent above a year ago. The index for household furnishings and operations increased 0.1 percent in December.
The transportation index fell 4.4 percent in December as several of its major components continue to decline. This was the fifth consecutive monthly decrease and the index is now down 13.3 percent over the past year. The motor fuel index decreased 16.8 percent in December. (Before seasonal adjustment, motor fuel prices fell 20.3 percent in December and were 42.2 percent below their December 2007 level) The index for new and used motor vehicles fell for the fifth straight month, declining 0.4 percent. The new vehicles index declined 0.4 percent and the index for used cars and trucks fell 0.8 percent. The index for public transportation declined 1.3 percent in December as the airline fare index decreased 1.2 percent. This was the fourth straight decline in the airline fare index, but it was still 1.4 percent higher than in December 2007.
The index for apparel turned down in December, declining 0.9 percent after rising 0.3 percent in November. Prior to seasonal adjustment, apparel prices fell 3.5 percent, and are 1.0 percent below their December 2007 level.
The index for medical care rose 0.3 percent in December after increasing 0.2 percent in November, and is up 2.6 percent over the past year. The medical care commodities index increased 0.5 percent, with the index for nonprescription drugs and medical supplies rising 1.1 percent. The index for medical care services advanced 0.2 percent in December after rising 0.1 percent in November. The physicians’ services index increased 0.4 percent and the index for hospital and related services rose 0.5 percent.
After being virtually unchanged in November, the index for recreation declined 0.2 percent in December. Decreases in the indexes for sporting goods, for photography, and for toys contributed to the decline. The index for video and audio, which fell 0.1 percent in November, increased 0.1 percent in December. The recreation index has increased 1.8 percent over the past year.
The index for education and communication rose 0.3 percent in December after advancing 0.2 percent in November and has risen 3.6 percent over the past year. The index for education increased 0.5 percent in December and the index for communication rose 0.2 percent. Within the latter group, the telephone services index increased 0.1 percent and the index for information technology, hardware and services rose 0.4 percent.
The index for other goods and services was virtually unchanged for the second consecutive month and rose 3.4 percent during all of 2008. The index for tobacco and smoking products rose 0.5 percent in December after being virtually unchanged in November. The index for personal care turned down in December, falling 0.2 percent after being virtually unchanged in November.