How did CPI-U inflation rates change from 2023 to 2025 for federal pay comparisons?

1. From high 2021–22 inflation to moderation in 2023 — the baseline for federal pay talks

The Bureau of Labor Statistics reports that consumer prices rose 3.4% from December 2022 to December 2023 for the CPI‑U, a notable deceleration from the 6.5% jump the year before; that 3.4% figure is the baseline many analysts used when discussing cost‑of‑living adjustments in early 2024 ^[1]. Policymakers and federal pay panels therefore entered 2024 comparing pay proposals to an annual CPI‑U rise of 3.4% rather than the multi‑year highs seen in 2021–22 ^[1].

2. December‑to‑December change used for many federal pay formulas — what happened in 2024

BLS materials and summary pages show that the CPI (all‑items CPI‑U) increased 2.9% from December 2023 to December 2024, meaning the year‑over‑year inflation measure commonly cited for federal pay comparisons fell another full percentage point from the 2023 result ^[2]. That downward move — from 3.4% (Dec‑to‑Dec 2023) to 2.9% (Dec‑to‑Dec 2024) — is the single most relevant change for automatic or negotiated pay adjustments that reference annual CPI changes ^{[1] [2]}.

3. 2025: monthly data show continued moderation but variability matters

Through 2025 monthly BLS releases and aggregator services report that headline CPI year‑over‑year readings hovered near roughly 2.9–3.0% in mid‑2025 and September 2025, with month‑to‑month CPI gains commonly around 0.3% ^{[2] [4] [3]}. Those monthly dynamics matter for any federal pay comparisons that use a moving 12‑month change or the most recent monthly release rather than a calendar‑year average ^{[4] [3]}.

4. Different CPI measures and windows can change the story

Federal pay decisions sometimes reference different indexes (CPI‑U, core CPI, chained CPI) or different windows (Dec‑to‑Dec, 12‑month ending in latest month, or average annual rates). For example, the chained CPI‑U (C‑CPI‑U) showed a 2.9% 12‑month increase in a recent BLS release, the same numeric 12‑month pace some sources report for mid‑2025 — but that measure and timing can produce materially different adjustment figures than headline CPI‑U depending on which is specified ^{[5] [2]}.

5. What this means for federal pay comparisons in practice

A federal worker or budget analyst comparing pay across 2023–25 should expect that the inflation number used to justify raises or locality increases dropped from 3.4% (Dec 2022–Dec 2023) to about 2.9% (Dec 2023–Dec 2024) and stayed around 2.9–3.0% by the middle of 2025 in headline monthly releases ^{[1] [2] [3]}. Whether that reduction translates into smaller pay increases depends on the statutory or negotiated index referenced (some mechanisms lock to Dec‑to‑Dec CPI, others to chained CPI or a blended average) — available sources do not mention which specific federal pay plans you are comparing.

6. Limitations, alternative viewpoints and hidden agendas to watch for

Sources emphasize different numbers (annual average, Dec‑to‑Dec, latest 12‑month) and that choice shapes the narrative: agencies seeking to restrain pay costs prefer shorter‑run or chained CPI measures that tend to be lower, while unions favor headline Dec‑to‑Dec CPI which historically yields larger adjustments; the BLS itself cautions that seasonal adjustments and revisions can alter short‑run seasonally adjusted monthly series ^{[5] [4]}. The Congressional Budget Office noted projections and revisions matter too — CBO projected CPI‑U growth and revised some estimates for 2023–25, which affects budgetary planning ^[6].

7. Quick numerical recap you can cite

• CPI‑U Dec‑to‑Dec: +3.4% (Dec 2022 → Dec 2023) ^[1].
• CPI (headline) Dec‑to‑Dec: +2.9% (Dec 2023 → Dec 2024) ^[2].
• Recent monthly year‑over‑year readings in 2025 near 2.9–3.0%; monthly increases often ≈0.3% in summer–fall 2025 releases ^{[2] [4] [3]}.

If you want, I can map those CPI series to a hypothetical federal pay formula (e.g., a 1:1 COLA tied to Dec‑to‑Dec CPI vs. chained CPI) to show the dollar‑level impact on typical GS pay scales — tell me which pay mechanism you need analyzed.