The Consumer Price Index for All Urban Consumers (CPI-U) for Dallas-Fort Worth rose 0.4 percent in December and January, the U.S. Bureau of Labor Statistics reported today. Assistant Commissioner for Regional Operations Stanley W. Suchman noted that a 4.1-percent advance in the energy index accounted for nearly 80 percent of the total area rise. The index for all items less food and energy was essentially unchanged (0.1 percent) and food prices registered no change. (Data in this report are not seasonally adjusted. Accordingly, bimonthly changes may reflect the impact of seasonal influences.)

During the year ended in January 2017, the all items CPI-U rose 2.7 percent, its fastest annual rate of gain since July 2013, also up 2.7 percent. The index for all items less food and energy increased 2.2 percent during the latest 12-month period. This was a slowdown from the annual changes recorded from May through November 2016, and the lowest annual rate since March 2016. (See chart 1 and table 1.)

Food

Food prices were unchanged in December and January, after essentially recording no change (-0.1 percent) in October and November. As in the previous bimonthly period, the two components of the food index registered opposing movements. Prices for food at home (grocery store prices) slipped 0.2 percent, while prices for food away from home edged up 0.2 percent.

From January 2016 to January 2017, food prices rose 0.3 percent, after posting an annual decline in November 2016. The latest over-the-year change was the combined result of a 1.4-percent increase in prices for food away from home and a 0.8-percent decrease in the cost of food at home.

Energy

The energy index climbed 4.1 percent in December and January, following a 0.4-percent rise in October and November 2016. The current increase was almost entirely due to higher motor fuel costs, up 8.2 percent, though a 2.1-percent rise in natural gas costs also contributed; electricity prices were unchanged.

During the year ended in January 2017, the energy index increased 13.5 percent, its first double-digit annual increase since February 2012. As in the two-month change, the latest annual rise was primarily the result of higher motor fuel costs, up 28.8-percent, combined with a 32.6-percent rise in natural gas costs. In contrast, electricity prices fell 3.5 percent over the year.

All items less food and energy

The index for all items less food and energy was little changed in December and January (0.1 percent) because of offsetting movements among the index sub-components. A 0.9-percent increase in shelter costs was the largest contributor to the slight rise, though higher charges for a host of items within private transportation, and education and communication, also played a role. The medical care index placed negative pressure on the category as these prices fell 2.0 percent in December and January; this was the second consecutive bimonthly decline in medical care costs. Other categories registering lower prices during the latest period included apparel (-2.6 percent), recreation (-1.3 percent), and other goods and services (-1.1 percent).

From January 2016 to January 2017, the index for all items less food and energy advanced 2.2 percent. Nearly all of the increase resulted from a 5.2-percent increase in shelter costs. Still, the 5.2-percent increase represented a slowdown from the last few months of 2016 when annual changes in shelter costs were about 6.0 percent. Higher prices for education and communication (1.2 percent), as well as other goods and services (0.7 percent) played a smaller role in the annual increase. In contrast, medical care prices declined over the year, falling 0.9 percent, and placing negative pressure on the index for all items less food and energy. This was the first annual decline in medical care prices since the year ended in March 2014.

The March 2017 Consumer Price Index for All Items for Dallas-Fort Worth is scheduled to be released Friday, April 14, 2017.

Technical Note

The Consumer Price Index (CPI) is a measure of the average change in prices over time in a fixed market basket of goods and services. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) a CPI for All Urban Consumers (CPI-U) which covers approximately 89 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 28 percent of the total population. The CPI-U includes, in addition to wage earners and clerical workers, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and the other goods and services that people buy for day-to-day living. Each month, prices are collected in 87 urban areas across the country from about 6,000 housing units and approximately 24,000 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.

The index measures price changes from a designated reference date (1982-84) that equals 100.0. An increase of 16.5 percent, for example, is shown as 116.5. This change can also be expressed in dollars as follows: the price of a base period "market basket" of goods and services in the CPI has risen from $10 in 1982-84 to $11.65. For further details, see the CPI home page on the Internet at www.bls.gov/cpi and the BLS Handbook of Methods, Chapter 17, The Consumer Price Index, available on the Internet at www.bls.gov/opub/hom/pdf/homch17.pdf.

In calculating the index, price changes for the various items in each location are averaged together with weights that represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. Because the sample size of a local area is smaller, the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index, although their long-term trends are quite similar. NOTE: Area indexes do not measure differences in the level of prices between cities; they only measure the average change in prices for each area since the base period.

The Dallas-Fort Worth, Texas, Consolidated Metropolitan Statistical Area (CMSA) includes Collin, Dallas, Denton, Ellis, Henderson, Hood, Hunt, Johnson, Kaufman, Parker, Rockwall, and Tarrant Counties.

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