Inflation Rate YoY

Inflation Rate YoY is the 12-month % change in CPI-U, the Consumer Price Index for All Urban Consumers, the broadest US retail inflation gauge. The publisher is the Bureau of Labor Statistics (BLS, the federal labor statistics agency), through its Consumer Price Index program. It covers urban consumers, about 93% of Americans, using about 94,000 price quotes plus about 8,000 rental quotes monthly, including sales and excise taxes. It is not a full cost of living index, a gauge of total welfare, nor a comparison of price levels across cities.

Prices are collected during the full calendar month. Fuels are priced monthly everywhere, and most items monthly in 3 large areas and every other month elsewhere. The BLS releases it monthly around mid-month for the prior month at 8:30 AM Eastern Time under embargo.

Each release shows 1-month adjusted change and 12-month unadjusted change with tables by category and area, alongside CPI-W and preliminary C-CPI-U. Headline numbers are final when issued, while adjusted series are revised each February for 5 years. Core strips volatile food and energy to show the underlying trend. Average prices for select food and energy items are published too.

Eight major groups move the basket on annual weights, with shelter dominant and food and energy adding steady and volatile pressure.

• Shelter, 35.483%: captures housing costs from rent at 7.499%, owners equivalent rent at 26.282% and lodging away from home.
• Food, 13.691%: captures groceries at 8.043% like cereals, meats, dairy and produce plus meals away from home at 5.648%.
• Energy, 6.216%: captures motor fuel with gasoline at 2.902% plus electricity at 2.343% and piped gas, the most volatile part.
• Transportation services, 6.305%: captures airline fares plus vehicle insurance, maintenance and repair.
• Medical care services, 6.747%: captures doctors, hospital and dental services plus prescription drugs, with drugs in commodities at 1.527%.
• New and used vehicles, 4.393% and 2.391%: captures price change for new vehicles and secondhand cars and trucks. Quality is adjusted at model changeover.

In June 2022, published July 13, 2022, the 12-month rate reached 9.1%, the largest since November 1981. Monthly prices rose 1.3% on an adjusted basis, while energy jumped 41.6% over 12 months and added nearly half the monthly rise.

Gasoline rose 59.9%, fuel oil 98.5% and piped gas 38.4%, while food rose 10.4% over 12 months. Core, all items less food and energy at 80.094% of the basket, rose only 5.9% as airline fares and lodging fell. Weight decided impact because shelter at 32.285% mattered more than fuel oil at 0.191% despite the smaller rise.

1. Price quotes: Collect matched quotes for the same item in 2 months across 32 areas and 243 items (7,776 cells). Fuels are priced monthly everywhere.
2. Basic indexes: For most categories use an expenditure-weighted geometric mean, a multiplicative average allowing modest substitution, of price ratios. A minority uses a Laspeyres formula, an arithmetic ratio assuming no substitution, including electricity and selected medical services.
3. Shelter estimator: Use a 6-month chained rent panel with adjustments for vacancies and aging. Quality change uses direct comparison, hedonic regression, a price model for features, or imputation.
4. Upper aggregation: Combine basic indexes with a modified Laspeyres formula using annual expenditure weights from the Consumer Expenditure Surveys refreshed each January. The base 1982-84 average equals 100. An index of 244.524 means a $100 base-period basket costs $244.52.
5. 12-month change: Divide index change by the old index and multiply by 100, using unadjusted indexes for 12-month change. Example: 296.311 minus 271.696 equals 24.615, divided by 271.696 gives about 9.1%.
6. Seasonal adjustment: Apply X-13ARIMA-SEATS, a statistical seasonal filter, to remove normal seasonal moves for monthly change. Broad aggregates are built from adjusted parts.