Transmission of material in this release is embargoed until                                        
8:30 a.m. (ET) August 11, 2021

Technical information: (202) 691-7000  •  cpi_info@bls.gov  •  www.bls.gov/cpi
Media Contact:         (202) 691-5902  •  PressOffice@bls.gov     USDL-21-1467

CONSUMER PRICE INDEX – JULY 2021

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in
July on a seasonally adjusted basis after rising 0.9 percent in June, the U.S.
Bureau of Labor Statistics reported today. Over the last 12 months, the all items
index increased 5.4 percent before seasonal adjustment.

The indexes for shelter, food, energy, and new vehicles all increased in July and
contributed to the monthly all items seasonally adjusted increase. The food index
increased 0.7 percent in July as five of the major grocery store food group
indexes rose, and the food away from home index increased 0.8 percent. The energy
index rose 1.6 percent in July, as the gasoline index increased 2.4 percent and
other energy component indexes also rose. 

The index for all items less food and energy rose 0.3 percent in July after
increasing 0.9 percent in June. Along with shelter and new vehicles, the indexes
for recreation, for medical care, and for personal care increased in July. The
index for used cars also increased in July, but the 0.2-percent advance was much
smaller than in recent months. The index for motor vehicle insurance declined in
July, and the index for airline fares fell slightly. 

The all items index rose 5.4 percent for the 12 months ending July, the same
increase as the period ending June. The index for all items less food and energy
rose 4.3 percent over the last 12 months, while the energy index rose 23.8
percent. The food index increased 3.4 percent for the 12 months ending July,
compared to a 2.4-percent rise for the period ending June.

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
                              2021  2021  2021  2021  2021  2021  2021   July
                                                                         2021

 All items..................    .3    .4    .6    .8    .6    .9    .5      5.4
  Food......................    .1    .2    .1    .4    .4    .8    .7      3.4
   Food at home.............   -.1    .3    .1    .4    .4    .8    .7      2.6
   Food away from home (1)..    .3    .1    .1    .3    .6    .7    .8      4.6
  Energy....................   3.5   3.9   5.0   -.1    .0   1.5   1.6     23.8
   Energy commodities.......   7.3   6.6   8.9  -1.4   -.6   2.6   2.3     41.2
    Gasoline (all types)....   7.4   6.4   9.1  -1.4   -.7   2.5   2.4     41.8
    Fuel oil (1)............   5.4   9.9   3.2  -3.2   2.1   2.9    .6     39.1
   Energy services..........   -.3    .9    .6   1.5    .7    .2    .8      7.2
    Electricity.............   -.2    .7    .0   1.2    .3   -.3    .4      4.0
    Utility (piped) gas
       service..............   -.4   1.6   2.5   2.4   1.7   1.7   2.2     19.0
  All items less food and
     energy.................    .0    .1    .3    .9    .7    .9    .3      4.3
   Commodities less food and
      energy commodities....    .1   -.2    .1   2.0   1.8   2.2    .5      8.5
    New vehicles............   -.5    .0    .0    .5   1.6   2.0   1.7      6.4
    Used cars and trucks....   -.9   -.9    .5  10.0   7.3  10.5    .2     41.7
    Apparel.................   2.2   -.7   -.3    .3   1.2    .7    .0      4.2
    Medical care
       commodities (1)......   -.1   -.7    .1    .6    .0   -.4    .2     -2.1
   Services less energy
      services..............    .0    .2    .4    .5    .4    .4    .3      2.9
    Shelter.................    .1    .2    .3    .4    .3    .5    .4      2.8
    Transportation services    -.3   -.1   1.8   2.9   1.5   1.5  -1.1      6.4
    Medical care services...    .5    .5    .1    .0   -.1    .0    .3       .8

   1 Not seasonally adjusted.

Food

The food index increased 0.7 percent in July after rising 0.8 percent in June.
The index for food at home also rose 0.7 percent, as the index for meats, poultry,
fish, and eggs continued to increase. This index rose 1.5 percent in July; this
was its seventh monthly increase in a row and followed a 2.5-percent increase in
June. The index for cereals and bakery products, which declined in June, rose 1.2
percent in July, its largest 1-month increase since April 2020. The index for
other food at home rose 0.8 percent in July, also the largest monthly increase
since April 2020. The index for nonalcoholic beverages rose 0.7 percent in July,
and the index for dairy and related products advanced 0.6 percent.

The index for fruits and vegetables was the only major grocery store food group
index to fall in July, declining 0.9 percent after rising 0.7 percent in June.
The index for fresh fruits fell 1.8 percent over the month.

The food away from home index rose 0.8 percent in July, its largest monthly
increase since February 1981. The index for limited service meals rose 1.0 percent
in July, and the index for full service meals increased 0.6 percent.

The food at home index increased 2.6 percent over the past 12 months. All six
major grocery store food group indexes rose over the span, with increases ranging
from 1.1 percent (nonalcoholic beverages) to 5.9 percent (meats, poultry, fish,
and eggs). The index for food away from home rose 4.6 percent over the last year.
The index for limited service meals rose 6.6 percent over the last 12 months, and
the index for full service meals rose 4.3 percent. Both 12-month increases were
the largest in the history of the respective series, which were first published 
in 1998. 

Energy

The energy index increased 1.6 percent in July after rising 1.5 percent in June.
All the major energy component indexes increased over the month. The gasoline
index rose 2.4 percent in July following a 2.5-percent increase in June. (Before
seasonal adjustment, gasoline prices rose 2.5 percent in July.) The index for
natural gas rose 2.2 percent in July after increasing 1.7 percent in both May and
June. The electricity index increased 0.4 percent in July after falling 0.3
percent the prior month. 

The energy index rose 23.8 percent over the past 12 months. The gasoline index
rose 41.8 percent since July 2020. The index for natural gas rose 19.0 percent
over the last 12 months, while the index for electricity increased 4.0 percent. 

All items less food and energy

The index for all items less food and energy rose 0.3 percent in July, its
smallest monthly increase in 4 months. The shelter index rose 0.4 percent in July
and accounted for over half of the monthly increase in the index for all items
less food and energy. The index for rent rose 0.2 percent and the index for
owners’ equivalent rent increased 0.3 percent. The index for lodging away from
home continued to rise sharply, increasing 6.0 percent in July after rising 7.0
percent in June. 

The index for new vehicles rose 1.7 percent in July and has now increased 5.4
percent over the last 3 months. The recreation index rose 0.6 percent in July
after increasing 0.2 percent in June. The index for medical care rose 0.3 percent
in July after declining in May and June. The index for physicians’ services rose
0.4 percent and the index for hospital services advanced 0.5 percent, while the
index for prescription drugs declined 0.1 percent. The index for personal care
increased 0.8 percent in July. 

The index for used cars and trucks rose 0.2 percent in July after rising at least
7.3 percent in each of the last 3 months. The deceleration in the index was a
major factor in the smaller monthly increase in the index for all items less food
and energy. The indexes for education, for communication, for tobacco, and for
alcoholic beverages all increased in July, while the indexes for household
furnishings and operations and for apparel were unchanged. 

The index for motor vehicle insurance was one of the few major component indexes
to decline in July, falling 2.8 percent after rising in each of the last 6 months.
The index for airline fares fell slightly in July, declining 0.1 percent after
rising sharply in recent months. 

The index for all items less food and energy rose 4.3 percent over the past 12
months. The index for used cars and trucks increased 41.7 percent over the span.
The index for new vehicles rose 6.4 percent, the largest 12-month increase since
the period ending January 1982. The shelter index increased 2.8 percent over the
last 12 months, and the medical care index rose only 0.3 percent. Few major
component indexes declined over the past 12 months. 

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 5.4 percent
over the last 12 months to an index level of 273.003 (1982-84=100). For the month,
the index increased 0.5 percent prior to seasonal adjustment.  

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
increased 6.0 percent over the last 12 months to an index level of 267.789
(1982-84=100). For the month, the index rose 0.5 percent prior to seasonal
adjustment.  

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 5.3
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 2021 is scheduled to be released on Tuesday,
September 14, 2021 at 8:30 a.m. (ET).



--------------------------------------------------------------------------------------------------
 Coronavirus (COVID-19) Pandemic Impact on July 2021 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-2021.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.

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 2021, BLS adjusted 72 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 2021, revised seasonal
factors and seasonally adjusted indexes for 2016 to 2020 were calculated and published.
For series which are directly adjusted using the Census X-13ARIMA-SEATS seasonal adjustment
software, the seasonal factors for 2020 will be applied to data for 2021 to produce the
seasonally adjusted 2021 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. Thirty-four of the
81 components of the U.S. city average all items index are not seasonally adjusted for 2021.

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.