The Consumer Price Index for All Urban Consumers (CPI-U) in the Detroit-Ann Arbor-Flint area rose 0.3 percent from October to December, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Charlene Peiffer noted that the energy index fell 0.4 percent while the food index was unchanged over the bi-monthly period. The index for all items less food and energy advanced 0.4 percent. Among the indexes within the all items less food and energy category, prices were higher for recreation and other goods and services while costs for apparel, new and used motor vehicles, and shelter fell. (Data in this report are not seasonally adjusted. Accordingly, month-to-month changes may reflect the impact of seasonal influences.)

Over the past 12 months the CPI-U advanced 3.5 percent. The energy index was up 8.8 percent, largely the result of an over-the-year increase in gasoline prices. The index for all items less food and energy rose 2.4 percent over the year.

Food

Food prices were unchanged from October to December after increasing 0.7 percent in the previous bi-monthly period. Between the two components of the food index, prices for food at home (grocery food) fell 0.4 percent while prices for food away from home were up 0.5 percent. Grocery prices stood 5.2 percent higher than last December while prices for food away from home cost 3.6 percent more than a year ago. From December 2010 to December 2011, overall food prices advanced 4.6 percent.

Energy

The energy index was down 0.4 percent from October to December after falling 6.2 percent in the previous bi-monthly period. Within the energy category, prices for gasoline and utility (piped) gas service fell 1.2 percent and 2.4 percent, respectively, while electricity prices rose 2.7 percent from October to December.

The energy index rose 8.8 percent over the year. In particular, gasoline prices increased 12.8 percent from December 2010 to December 2011. In the previous annual period ended in December 2010, gasoline prices advanced 16.0 percent. The electricity index was 8.9 percent higher compared to last December while costs for utility (piped) gas service fell 4.3 percent over the year.

All items less food and energy

The index for all items less food and energy was up 0.4 percent from October to December. Among the index’s components, price increases were recorded over the two-month period for recreation (15.5 percent) and other goods and services (1.1 percent). In contrast, prices for apparel (-9.0 percent), new and used motor vehicles, and shelter (-0.2 percent) fell in December.

Over the year, the index for all items less food and energy rose 2.4 percent. An 11.1 percent increase in recreation prices was a contributing factor.

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The February 2012 Consumer Price Index for Detroit is scheduled to be released on March 16, 2012, at 8:30 a.m. (ET).

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 87 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 32percent 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 4,000 housing units and approximately 25,000 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/homch17_a.htm.

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 Detroit-Ann Arbor-Flint, Mich. consolidated area covered in this release is comprised of Genesee, Lapeer, Lenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, and Wayne Counties in Michigan.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: 202-691-5200; TDD message referral phone number:  1-800-877-8339.

For personal assistance or further information on Consumer Price Indexes, as well as other Bureau products, contact the Midwest Information Office at (312) 353-1880 from 9:00 a.m. to 5:00 p.m. ET.