Transmission of material in this release is embargoed until                                        
8:30 a.m. (ET) August 12, 2020                 USDL-20-1552

Technical information: (202) 691-7000  •  cpi_info@bls.gov  •  www.bls.gov/cpi
Media Contact:         (202) 691-5902  •  PressOffice@bls.gov 

CONSUMER PRICE INDEX – JULY 2020

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6 percent
in July on a seasonally adjusted basis, the same increase as in June, the U.S.
Bureau of Labor Statistics reported today. Over the last 12 months, the all
items index increased 1.0 percent before seasonal adjustment.

The gasoline index continued to rise in July after increasing sharply in June
and accounted for about one quarter of the monthly increase in the seasonally
adjusted all items index. The energy index increased 2.5 percent in July as the
gasoline index rose 5.6 percent. This was partially offset by the food index,
which decreased 0.4 percent in July, with the index for food at home declining
1.1 percent. 

The index for all items less food and energy rose 0.6 percent in July, its
largest increase since January 1991. The index for motor vehicle insurance
increased sharply in July, as it did the previous month. The indexes for shelter,
communication, used cars and trucks, and medical care also increased in July,
while the index for recreation declined. 

The all items index increased 1.0 percent for the 12 months ending July, a
larger increase than the 0.6-percent rise for the period ending June. The index
for all items less food and energy increased 1.6 percent over the last 12 months.
The food index increased 4.1 percent over the last 12 months, with the index for
food at home rising 4.6 percent. Despite increasing in July, the energy index
fell 11.2 percent over the last 12 months. 


 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.
                              Jan.  Feb.  Mar.  Apr.  May   June  July   ended 
                              2020  2020  2020  2020  2020  2020  2020   July  
                                                                         2020  
                                                                               
                                                                               
 All items..................    .1    .1   -.4   -.8   -.1    .6    .6      1.0
  Food......................    .2    .4    .3   1.5    .7    .6   -.4      4.1
   Food at home.............    .1    .5    .5   2.6   1.0    .7  -1.1      4.6
   Food away from home (1)..    .4    .2    .2    .1    .4    .5    .5      3.4
  Energy....................   -.7  -2.0  -5.8 -10.1  -1.8   5.1   2.5    -11.2
   Energy commodities.......  -1.6  -3.5 -10.4 -20.0  -3.5  11.7   5.3    -20.2
    Gasoline (all types)....  -1.6  -3.4 -10.5 -20.6  -3.5  12.3   5.6    -20.3
    Fuel oil................   -.4  -8.5 -13.7 -15.6  -6.3  10.2   4.3    -27.2
   Energy services..........    .6   -.3   -.5    .1   -.5   -.2    .0      -.1
    Electricity.............    .4   -.1   -.2    .1   -.8   -.3    .3      -.1
    Utility (piped) gas                                                        
       service..............   1.0   -.9  -1.4    .2    .8    .0  -1.0      -.3
  All items less food and                                                      
     energy.................    .2    .2   -.1   -.4   -.1    .2    .6      1.6
   Commodities less food and                                                   
      energy commodities....    .0    .2   -.3   -.7   -.2    .2    .7      -.5
    New vehicles............    .0    .1   -.4    .0    .3    .0    .8       .5
    Used cars and trucks....  -1.2    .4    .8   -.4   -.4  -1.2   2.3      -.9
    Apparel.................    .7    .4  -2.0  -4.7  -2.3   1.7   1.1     -6.5
    Medical care commodities   -.6   -.6    .0   -.1    .1    .2    .0      1.1
   Services less energy                                                        
      services..............    .3    .2    .0   -.4    .0    .3    .6      2.3
    Shelter.................    .4    .3    .0    .0    .2    .1    .2      2.3
    Transportation services     .3    .3  -1.9  -4.7  -3.6   2.1   3.6     -3.7
    Medical care services...    .3    .3    .5    .5    .6    .5    .5      5.9

   1 Not seasonally adjusted. 
   

Food

The food index decreased 0.4 percent in July, its first decrease since April
2019. The food at home index fell 1.1 percent in July after increasing 0.7
percent in June. Five of the six major grocery store food group indexes fell in
July. The index for meat, poultry, fish, and eggs decreased 3.8 percent in July.
This decline was led by the index for beef, which fell 8.2 percent in July after
increasing sharply in recent months.

The index for dairy and related products declined 0.8 percent in July after a
0.4-percent decrease in June. The index for nonalcoholic beverages fell 0.5
percent in July, while the index for cereals and bakery products declined 0.4
percent and the index for other food at home fell 0.2 percent. The only major
grocery store food group index to increase in July was fruits and vegetables,
which rose 0.1 percent.

The index for food away from home rose 0.5 percent in July, as it did in June.
The index for full service meals increased 0.4 percent, following a 0.9-percent
increase in June. The index for limited service meals advanced 0.6 percent in
July after rising 0.5 percent in June.   

The food at home index increased 4.6 percent over the last 12 months. All six
major grocery store food group indexes rose over that span. The index for beef
increased 14.2 percent over the last 12 months, contributing to an 8.4-percent
increase in the index for meats, poultry, fish, and eggs. The remaining groups
rose more modestly, with increases ranging from 2.3 percent (fruits and
vegetables) to 5.0 percent (nonalcoholic beverages). The index for food away
from home rose 3.4 percent over the last year. The index for limited service
meals increased 4.5 percent and the index for full service meals rose 2.9
percent over the last 12 months.

Energy

The energy index rose 2.5 percent in July after rising 5.1 percent in June. The
increase was predominantly a result of the gasoline index, which rose 5.6 percent
in July following a 12.3-percent increase in June. (Before seasonal adjustment,
gasoline prices rose 4.8 percent in July.) The electricity index increased 0.3
percent in July, following a decline of 0.3 percent in June. The index for
natural gas, in contrast, fell 1.0 percent over the month.

The energy index fell 11.2 percent over the past 12 months. The gasoline index
decreased 20.3 percent, while the fuel oil index fell 27.2 percent. The index
for natural gas declined 0.3 percent and the index for electricity decreased
slightly over the year, falling 0.1 percent.

All items less food and energy

The index for all items less food and energy increased 0.6 percent in July after
increasing 0.2 percent in June. The index for motor vehicle insurance rose
sharply by 9.3 percent in July following a 5.1-percent increase in June. The
shelter index rose 0.2 percent in July, with the indexes for rent and owners’
equivalent rent both increasing 0.2 percent. 

The medical care index rose 0.4 percent in July, as it did in June. The index for
physicians’ services increased 0.7 percent, and the index for hospital services
rose 0.2 percent. The index for prescription drugs, however, decreased 0.2
percent in July after increasing 0.1 percent in June. 

The index for communication increased 1.9 percent in July, as the index for
wireless telephone services rose 3.6 percent. The index for used cars and trucks
increased 2.3 percent over the month, ending a 3-month string of declines. The
airline fares index increased 5.4 percent in July following a 2.6-percent rise
in June. Other indexes that increased in July include new vehicles (+0.8 percent),
apparel (+1.1 percent), household furnishings and operations (+0.5 percent),
and personal care (+0.2 percent). The recreation index declined 0.6 percent in
July, as it did in June.

The index for all items less food and energy rose 1.6 percent over the past 12
months. The shelter index rose 2.3 percent over the 12-month span. The index for
rent increased 3.1 percent and the index for owners’ equivalent rent rose 2.8
percent, while the index for lodging away from home fell 13.4 percent. The
medical care index increased 5.0 percent over the last 12 months. The indexes
for airline fares, apparel, motor vehicle insurance, and used cars and trucks
all declined over the past 12 months. 

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.0 percent
over the last 12 months to an index level of 259.101 (1982-84=100). For the
month, the index rose 0.5 percent prior to seasonal adjustment.  

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
increased 1.0 percent over the last 12 months to an index level of 252.636
(1982-84=100). For the month, the index rose 0.6 percent prior to seasonal
adjustment.  

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.7
percent over the last 12 months. For the month, the index increased 0.5 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 August 2020 is scheduled to be released on Friday,
September 11, 2020 at 8:30 a.m. (ET).

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Coronavirus (COVID-19) Pandemic Impact on July 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 July 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.

---------------------------------------------------------------------------------------------------



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.