Consumer Price Index Summary

 Transmission of material in this release is embargoed until                                        
 8:30 a.m. (EDT) September 16, 2016             USDL-16-1828

 Technical information: (202) 691-7000    Reed.Steve@bls.gov    www.bls.gov/cpi
 Media Contact:         (202) 691-5902    PressOffice@bls.gov 

 CONSUMER PRICE INDEX – AUGUST 2016

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent
 in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics
 reported today. Over the last 12 months, the all items index rose 1.1 percent
 before seasonal adjustment.

 The seasonally adjusted increase in the all items index was caused by a rise
 in the index for all items less food and energy. It increased 0.3 percent in
 August, as the indexes for shelter and medical care advanced. 

 The energy and food indexes were both unchanged in August. Major energy
 component indexes were mixed, with increases in the indexes for natural gas
 and electricity offsetting declines in the gasoline and fuel oil indexes.
 The food at home index declined for the fourth month in a row, offsetting an
 increase in the index for food away from home.   

 The 0.3-percent increase in the index for all items less food and energy was
 the largest rise since February 2016. Along with shelter and medical care,
 the indexes for motor vehicle insurance, apparel, communication, and tobacco
 all increased. In contrast, the indexes for used cars and trucks, household
 furnishings and operations, recreation, and airline fares all declined
 in August.

 The all items index rose 1.1 percent for the 12 months ending August, a larger
 increase than the 0.8-percent rise for the 12 months ending July. The index for
 all items less food and energy rose 2.3 percent for the 12 months ending August.
 The food index was unchanged over the last year, while the energy index
 declined 9.2 percent. 

 Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city
 average
                                                                               
                                                                               
                                  Seasonally adjusted changes from             
                                          preceding month                      
                                                                          Un-  
                                                                       adjusted
                                                                        12-mos.
                              Feb.  Mar.  Apr.  May   June  July  Aug.   ended 
                              2016  2016  2016  2016  2016  2016  2016   Aug.  
                                                                         2016  
                                                                               
                                                                               
 All items..................   -.2    .1    .4    .2    .2    .0    .2      1.1
  Food......................    .2   -.2    .2   -.2   -.1    .0    .0       .0
   Food at home.............    .2   -.5    .1   -.5   -.3   -.2   -.2     -1.9
   Food away from home (1)..    .1    .2    .2    .2    .2    .2    .2      2.8
  Energy....................  -6.0    .9   3.4   1.2   1.3  -1.6    .0     -9.2
   Energy commodities....... -12.5   1.9   7.8   2.4   3.3  -4.4   -.9    -17.3
    Gasoline (all types).... -13.0   2.2   8.1   2.3   3.3  -4.7   -.9    -17.8
    Fuel oil (1)............  -2.9   1.7   1.9   6.2   3.3  -1.3  -2.5    -12.8
   Energy services..........    .1    .2   -.1    .2   -.5   1.0    .8      -.4
    Electricity.............   -.2    .4   -.3   -.2   -.5    .5    .5      -.7
    Utility (piped) gas                                                        
       service..............   1.0   -.7    .6   1.7   -.4   3.1   2.1      1.1
  All items less food and                                                      
     energy.................    .3    .1    .2    .2    .2    .1    .3      2.3
   Commodities less food and                                                   
      energy commodities....    .3   -.2   -.1   -.2   -.2   -.1    .1      -.5
    New vehicles............    .2    .0   -.3   -.1   -.2    .2    .0       .0
    Used cars and trucks....    .2   -.1   -.3  -1.3  -1.1  -1.0   -.6     -4.0
    Apparel.................   1.6  -1.1   -.3    .8   -.4    .0    .2       .3
    Medical care commodities    .6    .3    .5   -.2   1.1    .4   1.1      4.5
   Services less energy                                                        
      services..............    .3    .2    .3    .3    .3    .2    .3      3.2
    Shelter.................    .3    .2    .3    .4    .3    .2    .3      3.4
    Transportation services     .2    .2    .7    .3    .3   -.2    .1      3.1
    Medical care services...    .5    .1    .3    .5    .2    .5    .9      5.1

   1 Not seasonally adjusted.


 Food

 The food index was unchanged in August, as it was in July. The index for food at
 home continued to decline, falling 0.2 percent as none of the six major grocery
 store food group indexes increased. The index for meats, poultry, fish, and eggs
 fell 0.4 percent in August, its twelfth decline in a row. The index for other
 food at home fell 0.2 percent, the same decline as last month, and the index for
 nonalcoholic beverages decreased 0.1 percent. The remaining major grocery store
 food group indexes were all unchanged in August.    

 The food index was unchanged over the past 12 months; this was the first time it
 did not rise over a 12 month period since the 12 months ending February 2010.
 The food at home index fell 1.9 percent over the past 12 months. The fruits and
 vegetables index rose 0.3 percent over the span, while the five other major
 grocery store food group indexes declined. The index for meats, poultry, fish,
 and eggs posted the largest decline, falling 6.5 percent. The index for food
 away from home continued to rise in August, increasing 0.2 percent. It has
 increased 2.8 percent over the past 12 months.  


 Energy

 The energy index, which declined in July after four consecutive increases, was
 unchanged in August. The gasoline index, which fell 4.7 percent in July,
 declined 0.9 percent in August. (Before seasonal adjustment, gasoline prices
 decreased 3.0 percent in August.) The fuel oil index also declined in August,
 falling 2.5 percent. In contrast to these declines, the index for natural gas
 continued to increase in August, rising 2.1 percent after a 3.1-percent increase
 in July. The electricity index advanced 0.5 percent in August, the same increase
 as in July. 

 The energy index has declined 9.2 percent over the past year. The gasoline index
 has declined 17.8 percent over that span, and the index for fuel oil has
 decreased 12.8 percent. Despite recent increases, the electricity index has also
 declined over the past 12 months, falling 0.7 percent. The index for natural gas
 is the only major energy component index to rise over the past year, increasing
 1.1 percent.  


 All items less food and energy

 The index for all items less food and energy increased 0.3 percent in August,
 following a 0.1-percent increase in July. The shelter index continued to rise,
 increasing 0.3 percent after a 0.2-percent advance the prior month. The indexes
 for rent and owners' equivalent rent both rose 0.3 percent in August, as they
 did in July. The index for lodging away from home turned up in August, increasing
 2.0 percent after a 2.4-percent decline the prior month. The medical care index
 rose sharply in August, increasing 1.0 percent. The hospital services index rose
 1.7 percent, and the index for prescription drugs advanced 1.3 percent. The index
 for motor vehicle insurance continued to rise in August, increasing 0.5 percent.
 The apparel index increased 0.2 percent, and the index for tobacco rose
 0.7 percent after falling in July.

 In contrast to these increases, the index for used cars and trucks continued to
 decline, falling 0.6 percent in August, its sixth consecutive decrease. The
 indexes for household furnishings and operations, for recreation, and for airline
 fares all fell slightly in August, each decreasing 0.1 percent. The indexes for
 new vehicles and for alcoholic beverages were unchanged in August.         
  
 The index for all items less food and energy increased 2.3 percent over the past
 12 months. Indexes increasing more rapidly include motor vehicle insurance
 (6.5 percent), medical care (4.9 percent), and shelter (3.4 percent). Among the
 indexes rising more slowly are alcoholic beverages (1.1 percent), recreation
 (0.9 percent), and apparel (0.3 percent). Indexes declining over the past
 12 months include used cars and trucks (-4.0 percent), airline fares
 (-3.5 percent), and household furnishings and operations (-0.9 percent).  


 Not seasonally adjusted CPI measures

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.1 percent over
 the last 12 months to an index level of 240.853 (1982-84=100). For the month, the
 index increased 0.1 percent prior to seasonal adjustment.  

 The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
 increased 0.7 percent over the last 12 months to an index level of 234.909
 (1982-84=100). For the month, the index increased 0.1 percent prior to seasonal
 adjustment.  

 The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.8
 percent over the last 12 months. For the month, the index was unchanged on a not
 seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months
 are subject to revision.  

	
 The Consumer Price Index for September 2016 is scheduled to be released on Tuesday,
 October 18, 2016, at 8:30 a.m. (EDT). 








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 Information from this release will be made available to sensory impaired individuals
 upon request.  Voice phone:  202-691-5200, Federal Relay Services:  1-800-877-8339.  

 Brief Explanation of the CPI
      
 The Consumer Price Index (CPI) is a measure of the average change in prices over
 time of goods and services purchased by households. The Bureau of Labor Statistics
 publishes CPIs for two population groups: (1) the CPI for Urban Wage Earners and
 Clerical Workers (CPI-W), which covers households of wage earners and clerical workers
 that comprise approximately 28 percent of the total population and (2) the CPI for All
 Urban Consumers (CPI-U) and the Chained CPI for All Urban Consumers (C-CPI-U), which
 covers approximately 89 percent of the total population and includes, in addition to
 wage earners and clerical worker households, 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 CPIs are based on prices of food, clothing, shelter, fuels, transportation fares,
 charges for doctors’ and dentists’ services, drugs, and other goods and services that
 people buy for day-to-day living. Prices are collected each month 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. Prices of fuels and a few other
 items are obtained every month in all 87 locations. Prices of most other commodities
 and services are collected every month in the three largest geographic areas and every
 other month in other areas. Prices of most goods and services are obtained by personal
 visits or telephone calls of the Bureau’s trained representatives.
      
 In calculating the index, price changes for the various items in each location are
 averaged together with weights, which represent their importance in the spending of the
 appropriate population group. Local data are then combined to obtain a U.S. city average.
 For the CPI-U and CPI-W separate indexes are also published by size of city, by region of
 the country, for cross-classifications of regions and population-size classes, and for 27
 local areas. Area indexes do not measure differences in the level of prices among cities;
 they only measure the average change in prices for each area since the base period.  For
 the C-CPI-U data are issued only at the national level. It is important to note that the
 CPI-U and CPI-W are considered final when released, but the C-CPI-U is issued in
 preliminary form and subject to two annual revisions.
      
 The index measures price change from a designed reference date. For the CPI-U and the
 CPI-W the reference base is 1982-84 equals 100. The reference base for the C-CPI-U is
 December 1999 equals 100.  An increase of 16.5 percent from the reference base, for
 example, is shown as 116.500. 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 visit the CPI home page on the Internet at www.bls.gov/cpi/ or
 contact our CPI Information and Analysis Section on (202) 691-7000.




 Note on Sampling Error in the Consumer Price Index

 The CPI is a statistical estimate that is subject to sampling error because it is based
 upon a sample of retail prices and not the complete universe of all prices. BLS
 calculates and publishes estimates of the 1-month, 2-month, 6-month and 12-month percent
 change standard errors annually, for the CPI-U.  These standard error estimates can be
 used to construct confidence intervals for hypothesis testing. For example, the estimated
 standard error of the 1 month percent change is 0.04 percent for the U.S. All Items
 Consumer Price Index.  This means that if we repeatedly sample from the universe of all
 retail prices using the same methodology, and estimate a percentage change for each sample,
 then 95% of these estimates would be within 0.08 percent of the 1 month percentage change
 based on all retail prices.  For example, for a 1-month change of 0.2 percent in the All
 Items CPI for All Urban Consumers, we are 95 percent confident that the actual percent
 change based on all retail prices would fall between 0.12 and 0.28 percent. For the latest
 data, including information on how to use the estimates of standard error, see "Variance
 Estimates for Price Changes in the Consumer Price Index, January-December 2014."  These
 data are available on the CPI home page (www.bls.gov/cpi), or by using the following
 link: www.bls.gov/cpi/cpivar2014.pdf   

 Calculating Index Changes

 Movements of the indexes from one month to another are usually expressed as percent changes
 rather than changes in index points, because index point changes are affected by the level
 of the index in relation to its base period while percent changes are not.  The example
 below illustrates the computation of index point and percent changes.
      
 Percent changes for 3-month and 6-month periods are expressed as annual rates and are
 computed according to the standard formula for compound growth rates. These data indicate
 what the percent change would be if the current rate were maintained for a 12-month period.

 Index Point Change

 CPI                                                                  202.416
 Less previous index                                                  201.800
 Equals index point change                                               .616



 Percent Change

 Index point difference                                                  .616
 Divided by the previous index                                        201.800
 Equals                                                                 0.003
 Results multiplied by one hundred                                  0.003x100
 Equals percent change                                                    0.3





 A Note on the Use of Seasonally Adjusted and Unadjusted Data

 Introduction

 The Consumer Price Index (CPI) produces both unadjusted and seasonally adjusted data.
 Seasonally adjusted data are computed using seasonal factors derived by the X-13ARIMA-SEATS
 Seasonal Adjustment Method. These factors are updated each February, and the new factors are
 used to revise the previous five years of seasonally adjusted data. For more information on
 data revisions and exceptions to the usual revision schedule, please see the Fact Sheet on
 Seasonal Adjustment (http://www.bls.gov/cpi/cpisaqanda.htm) and the Timeline of Seasonal
 Adjustment Methodological Changes (http://www.bls.gov/cpi/cpiseastimeline.htm).
 
 How to Use Seasonally Adjusted and Unadjusted Data

 For analyzing short-term price trends in the economy, seasonally adjusted changes are usually
 preferred since they eliminate the effect of changes that normally occur at the same time and
 in about the same magnitude every year—such as price movements resulting from changing
 climatic conditions, production cycles, model changeovers, holidays, and sales. This allows
 data users to focus on changes that are not typical for the time of year.The unadjusted data
 are of primary interest to consumers concerned about the prices they actually pay. Unadjusted
 data are also used extensively for escalation purposes. Many collective bargaining contract
 agreements and pension plans, for example, tie compensation changes to the Consumer Price Index
 before adjustment for seasonal variation. BLS advises against the use of seasonally adjusted
 data in escalation agreements because seasonally adjusted series are revised annually.

 Intervention Analysis
 
 The Bureau of Labor Statistics uses Intervention Analysis Seasonal Adjustment for some CPI
 series. Sometimes extreme values or sharp movements can distort the underlying seasonal pattern
 of price change. Intervention Analysis Seasonal Adjustment is a process by which the distortions
 caused by such unusual events are estimated and removed from the data prior to calculation of
 seasonal factors. The resulting seasonal factors, which more accurately represent the seasonal
 pattern, are then applied to the unadjusted data. 

 2016 Series Adjusted Using Intervention Analysis Seasonal Adjustment

 For the seasonal factors introduced in January 2016, BLS adjusted 37 series using Intervention
 Analysis Seasonal Adjustment, including selected food and beverage items, motor fuels and natural
 gas. For example, this procedure was used for the Motor fuel series to offset the effects of
 events such as the response in crude oil markets to the worldwide economic downturn in 2008.

 Revision of Seasonally Adjusted Indexes
 
 Seasonally adjusted data, including the U.S. city average All items index levels, are subject to
 revision for up to five years after their original release. Every year, economists in the CPI
 calculate new seasonal factors for seasonally adjusted series and apply them to the last five years
 of data. Seasonally adjusted indexes beyond the last five years of data are considered to be final
 and not subject to revision. In January 2016, revised seasonal factors and seasonally adjusted
 indexes for 2011-2015 were calculated and published. For directly adjusted series, the seasonal
 factors for 2015 will be applied to data in 2016 to produce the seasonally adjusted 2016 indexes.
 
 Determining Seasonal Status

 Each year the seasonal status of every series is reevaluated based upon certain statistical criteria.
 Using these criteria, BLS economists determine whether a series should change its status: from "not
 seasonally adjusted" to "seasonally adjusted", or vice versa. If any of the 81 components of the U.S.
 city average all items index change their seasonal adjustment status from seasonally adjusted to not
 seasonally adjusted, not seasonally adjusted data will be used in the aggregation of the dependent
 series for the last five years, but the seasonally adjusted indexes before that period will not be
 changed. 28 of the 81 components of the U.S. city average all items index are not seasonally adjusted
 for 2016.

 Contact Information
 
 For additional information on seasonal adjustment in the CPI, please write to the Bureau of Labor
 Statistics, Division of Consumer Prices and Price Indexes, Washington, DC 20212 or contact Justin
 Yarros, Samuel An or Marie Rogers at (202) 691-6968 or by e-mail at Yarros.Justin@bls.gov,
 An.Samuel@bls.gov or Rogers.Marie@bls.gov. If you have general questions about the CPI, please call
 our information staff at (202) 691-7000. 




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Last Modified Date: September 16, 2016