Price Increases That Feel Normal: Compare to the 12-Month CPI

Before you raise a price, compare the change with the 12-month consumer price index. The U.S. consumer price index rose 0.4 percent in August and was up 3.4 percent over the 12 months ending August. Gasoline prices rose 3.9 percent in August and were up 27.4 percent from a year earlier. The CPI tracks changes in the cost of a market basket of goods and services for urban consumers over time. Compare your proposed percentage increase to that 12-month number: at or below it is nearly invisible, well above it invites scrutiny; if you sell food, also check the food or food-away-from-home line.

Use the 12-month number, not the monthly move

The monthly move is too small to cover a real cost increase, and it can make a larger change look reckless. The 12-month view matches what customers have felt across a full year of bills, groceries, and fuel. A monthly number can look low even when the yearly cost pressure is high, so it does not give the customer a fair frame. Write down the 12-month number before you touch your price list.

Run the test before you print the new price

• Find the benchmark. Write down the 12-month consumer price index figure from the current report.
• Set your increase at or below it. If your proposed change is at or below the benchmark number, it stays inside the general pace. The result is a price sheet where the largest increase does not exceed the benchmark.
• Use the food line if you sell food. Food prices gained 0.1 percent in August and stood 2.7 percent above the level from a year earlier. If you sell meals, the food away from home index gained 0.3 percent in August and stood 3.4 percent above the level from a year earlier. Keep a separate note for the matching line.
• Check core prices if your costs are not food or fuel. Core prices, which exclude volatile gasoline and grocery measurements, gained 0.3 percent in August and stood 2.4 percent higher than a year earlier. Keep a second number next to the main benchmark for services or non-food goods.
• Write the customer note before you send the invoice. Say the change follows the general cost trend, and keep the explanation short. The invoice or email should carry a short sentence, not a paragraph of excuses.

Match the number to your costs

Energy prices gained 2.1 percent in August and stood 16.3 percent above the level from a year earlier. If your business does not sell fuel, a fuel spike is not a clean reason to raise your price by the same amount. Use the broader index, and use core prices when your costs are not tied to fuel or groceries.

The all-items CPI rose 2.7 percent from December 2024 to December 2025, with food up 3.1 percent and food away from home up 4.1 percent. Energy costs rose 2.3 percent in 2025, after falling 0.5 percent in 2024 and 2.0 percent in 2023. These figures show that the right line depends on what customers buy and what your costs track, so choose the line before you print.

Over the year ending December 2021, gasoline prices increased by almost 50 percent, food prices by 6.3 percent, and rent prices by 3.3 percent. Average civilian employee wages and salaries increased 4.5 percent over the year ending December 2021. A price increase that feels normal in a low-inflation period can feel aggressive in a high-inflation period, so check the current index before you decide each time.

Check expectations before you send the note

The October 2025 NY Fed Survey of Consumer Expectations found that households' short-term inflation expectations fell, while medium- and longer-term expectations stayed unchanged. The Conference Board's August 2026 survey found that consumers' average and median 12-month inflation expectations were slightly higher. Do not assume everyone is watching the same number. Expectations move at different speeds, so the same price change can feel routine to one customer and sharp to another. Use the 12-month CPI as your limit, and keep the note short enough that the customer can check the math without a second email.