The Consumer Price Index (CPI) rose 0.8 percent in 2014 after a 1.5 percent increase in 2013. This is the second-smallest December-December increase in the last 50 years, trailing only the 0.1 percent increase in 2008. It is considerably lower than the 2.1 percent average annual increase over the last ten years.
The energy index, which rose slightly in both 2012 and 2013, declined sharply in 2014, falling 10.6 percent, the largest decline since 2008. The gasoline index was the main cause of the decline, falling 21.0 percent, with most of the decrease over the last few months of the year. This followed a 1.0 percent decline in 2013. The fuel oil index declined as well, falling 19.1 percent in 2014 after a 1.8 percent decline in 2013. In contrast, the energy services index accelerated in 2014, rising 3.7 percent after a 2.4 percent advance in 2013. The electricity index rose 3.1 percent in 2014, similar to its 3.2 percent advance in 2013. The index for natural gas, which fell slightly in 2013, rose 5.8 percent in 2014, ending a streak of five years of declines. Despite the decline in 2014, the energy index has risen at a 3.2 percent annual rate over the past 10 years.
The Real Story About Rising Food Costs
The index for food rose 3.4 percent in 2014, a substantial acceleration from its 2013 increase of 1.1 percent. The index for food at home rose 3.7 percent in 2014 after rising only 0.4 percent in 2013. All six major grocery store food group indexes increased in 2014. The index for meats, poultry, fish, and eggs, which rose 2.9 percent in 2013, increased 9.2 percent, its largest December-December increase since 2003. The index for beef and veal rose 18.7 percent in 2014. The index for dairy and related products rose 5.3 percent in 2014, while the index for fruits and vegetables advanced 3.2 percent; both had declined in 2013. Also turning up after declining in 2013 was the index for other food at home (up 1.5 percent) and the index for nonalcoholic beverages (up 0.7 percent). The only major grocery store food group index not to accelerate was cereals and bakery products, which repeated its 2013 increase of 0.5 percent. The index for food away from home rose 3.0 percent in 2014 after increasing 2.1 percent in 2013. Over the last ten years, the food index has risen at an average annual rate of 2.7 percent.
The index for all items less food and energy rose 1.6 percent in 2014, a slight deceleration from its 1.7 percent increase in 2013, and below its 1.9 percent annual rate over the past ten years. The shelter index accelerated in 2014, increasing 2.9 percent after advancing 2.5 percent in 2013. This was its largest increase since 2007. The rent index rose 3.4 percent and the index for owners’ equivalent rent increased 2.6 percent. The medical care index also accelerated, rising 3.0 percent after a 2.0 percent increase in 2013. The new vehicles index accelerated slightly, rising 0.5 percent in 2014 after a 0.4 percent advance the previous year. The personal care index decelerated slightly, rising 1.3 percent in 2014 following a 1.4 percent increase in 2013. The recreation index was unchanged in 2014 after rising slightly in 2013. The index for used cars and trucks turned down in 2014, falling 4.2 percent after rising 2.0 percent in 2013. Similarly, the apparel index, which rose 0.6 percent in 2013, fell 2.0 percent in 2014. The index for household furnishings and operations continued to decline in 2014, falling 0.9 percent after a 1.4 percent decrease the previous year. The index for airline fares also continued to fall, declining 4.7 percent after a 1.4 percent decrease the prior year.