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What price changes contributed the most to increases in the CPI in 2024?

By Casey Carter

Between December 2023 and December 2024, consumer prices experienced disinflation, where prices still increased but by a smaller amount than before. The Consumer Price Index (CPI), a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services, increased 2.9 percent from December 2023 to December 2024. This was a slower rate of increase than in the three previous 12-month periods ending in December.

This Beyond the Numbers article explores the year-over-year price changes in December 2024 for major categories in the Consumer Price Index for All Urban Consumers (CPI-U). The article focuses on the components that contributed the most to the overall year-over-year change, including the housing major component group and the food and beverages major component group.

All items CPI-U increase in 2024

The all items CPI-U increased 2.9 percent between December 2023 and December 2024, a smaller increase than the 3.4-percent increase in the 12 months ending in December 2023. While each of the eight major component groups rose over the year, five of the eight decelerated from December 2023 to December 2024, continuing the trend from the previous year.

The major component groups that increased by a greater amount in 2024 than in 2023 were medical care, education and communication, and apparel. Of the major component groups, housing had the largest 12-month percent change in December 2024, increasing 4.1 percent from the year before.

Accordingly, the housing major component group accounted for 63.5 percent of the increase in all items for the same period (the largest contribution). The major component group with the next largest contribution was food and beverages, which accounted for 12.2 percent of the increase in the all items CPI-U. Other notable contributors to the increase in the all items CPI-U included transportation, which accounted for 8.8 percent of the change, and medical care, which accounted for 7.9 percent.

Most of the increase in the CPI-U can be attributed to rising costs for shelter, which is a component of the housing major component group. When shelter is included, the CPI-U for all items increased by 2.9 percent. By contrast, when shelter is excluded, the CPI-U increased 1.9 percent, the same price change for all items excluding shelter from the previous year. Food and energy had a smaller impact on the all items price change than shelter. Excluding food and energy, the CPI-U increased 3.2 percent. While this was a smaller increase than the 3.9-percent increase the year before, it was a larger increase than in the all items CPI-U.

Increase in housing prices

As previously mentioned, as shelter and most utility prices increased over the year, housing costs continued to rise in 2024. Shelter prices rose 4.6 percent from December 2023 to December 2024, a smaller increase than the 6.2-percent increase in the previous year. Rent of primary residence and owners’ equivalent rent of primary residence both rose during this period (4.3 percent and 4.8 percent, respectively).¹

Fuels and utilities increased 3.4 percent over the 12 months ending in December 2024. Nonetheless, the components of fuels and utilities were mixed. After declining 13.8 percent the year before, natural gas costs rose 4.9 percent. After increasing 3.3 percent in the 12 months ending in December 2023, electricity prices increased 2.8 percent in the 12 months ending in December 2024. By contrast, after falling in the previous year, fuel oil prices continued to decline, decreasing 13.1 percent from the year before.

Prices for water and sewerage maintenance and garbage and trash collection continued to rise, with increases of 5.6 percent and 4.3 percent, respectively.

Increase in food and beverage prices

Food and beverage prices rose 2.4 percent in the 12 months ending in December 2024. Food at home costs increased 1.8 percent over the year, with prices for all six grocery store food components increasing during this period. Prices in the meats, poultry, fish, and eggs component rose the most between December 2023 and December 2024, increasing 4.2 percent. This increase was led by a 36.8-percent rise in egg prices.

After meats, poultry, fish, and eggs, the next largest increase for the six grocery store food components was in nonalcoholic beverages and beverage materials, which increased 2.3 percent.

Prices for dairy and related products increased 1.3 percent, after declining 1.3 percent in the previous year.

Fruits and vegetables prices increased 1.0 percent from December 2023 to December 2024, after increasing 0.3 percent in the previous year. While fresh fruits and processed fruits and vegetables prices declined over the year, fresh vegetables prices increased by 3.1 percent.

Prices for cereals and bakery products increased 0.8 percent over the year, as did other food at home (which includes food items such as candy, snacks, and sauces). For both components, this was a smaller increase than in the 12 months ending in December 2023. 

Food away from home prices increased 3.6 percent, continuing to outpace the rise in food at home prices. Prices for full-service and limited-service meals increased 3.6 percent and 3.7 percent, respectively.

Alcoholic beverages prices increased 1.4 percent from December 2023 to December 2024. Like food prices, prices for alcoholic beverages away from home (1.9 percent) increased more than alcoholic beverages at home (1.0 percent). For both indexes, the increase was led by beer, ale, and other malt beverages.

Increase in transportation prices

Transportation prices increased 1.6 percent from December 2023 to December 2024. Airline fare prices increased 7.9 percent, after declining in the previous year. Prices for both new vehicles and used cars and trucks declined over the year, falling 0.4 percent and 3.3 percent, respectively.

While new and used motor vehicles prices declined, costs for motor vehicle parts and equipment, maintenance, insurance, and other vehicle-related fees increased over the year, contributing to the year-over-year increase in the transportation index. Of these components, motor vehicle insurance costs saw the largest increase, rising 11.3 percent. This was a smaller increase than the 20.3-percent increase in the previous year.

Like insurance costs, motor vehicle maintenance and repair costs, as well as motor vehicle fees, saw smaller increases between December 2023 and December 2024 than in the previous year. After rising 7.1 percent in the year prior, motor vehicle maintenance and repair costs increased 6.2 percent between December 2023 and December 2024.

Over the same period, motor vehicle fees increased 1.3 percent. Within motor vehicle fees, costs for state motor vehicle registration and license fees increased 2.1 percent, and costs for parking fees and tolls increased 4.6 percent.

After declining 1.2 percent in the previous year, prices for motor vehicle parts and equipment increased 1.3 percent between December 2023 and December 2024.

Motor fuel prices continued to decline, decreasing 3.8 percent. For the third consecutive year, prices for gasoline (all types) decreased, declining 3.4 percent between December 2023 and December 2024. Other motor fuels decreased 13.5 percent over the year.

Increase in medical care costs

Costs for medical care increased 2.8 percent from December 2023 to December 2024, a larger increase than the 0.5-percent increase in the 12 months ending in December 2023.

Prescription drugs prices increased 1.1 percent over the year, and prices for nonprescription drugs decreased 0.3 percent. Prices for medical equipment and supplies also declined between December 2023 and December 2024, decreasing by 1.1 percent.

Costs for medical care services increased 3.4 percent over the same period. Professional services increased 2.8 percent, with each component of this index also increasing. Costs for physicians’ services increased by 2.6 percent, dental services increased by 3.0 percent, and services by other medical professionals increased by 1.8 percent. The professional services component that increased the most over the year was eyeglasses and eyecare, which increased 4.3 percent. Finally, the consumer price index for health insurance increased between December 2023 and December 2024, by 4.8 percent.

Other notable price changes

Apparel prices increased 1.2 percent from December 2023 to December 2024. Men’s apparel prices increased 1.8 percent over the year, and women’s apparel prices increased 0.4 percent. Boys’ apparel and girls’ apparel prices also increased over the year, rising 5.7 percent and 2.2 percent, respectively. Likewise, footwear prices rose 0.6 percent.

Recreation costs increased 1.1 percent in the 12 months ending in December 2024. Prices for recreation commodities declined 1.5 percent over the year. Recreation commodities includes prices for sporting goods, which declined 2.0 percent, and prices for pets and pet products, which decreased 0.9 percent. Prices for recreation services increased 2.7 percent over the same period. Among these are video and audio service prices, which increased 1.5 percent over the year. Costs for other recreation services, which includes prices for admissions fees and club memberships, increased by 2.8 percent.

Education and communication prices rose 0.6 percent. Education costs increased 4.0 percent over the year and communication costs declined by 1.8 percent.

Other goods and services prices increased 3.3 percent over the year. This category includes personal care products and services, tobacco and smoking products, and other personal services (such as legal services or financial services). Lastly, costs for personal care increased 2.5 percent and prices for tobacco and smoking products increased 6.7 percent.

Summary

The CPI-U for all items increased 2.9 percent from December 2023 to December 2024, after rising 3.4 percent the previous year. Shelter continued to be the main driver of the increase in the all items CPI-U, as it was in 2023. Over the year, prices rose for all other major component groups, with notable increases in food and beverages, medical care, and other goods and services.

This Beyond the Numbers article was prepared by Casey Carter, economist in the Office of Prices and Living Conditions (OPLC), U.S. Bureau of Labor Statistics. E-mail: CPI_info@bls.gov; telephone: (202) 691-7000.

If you are deaf, hard of hearing, or have a speech disability, please dial 7-1-1 to access telecommunications relay services or the information voice phone at: (202) 691-5200. This article is in the public domain and may be reproduced without permission.