Transmission of material in this release is embargoed until                                        
 8:30 a.m. (EDT) August 10, 2018  USDL-18-1278

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

 CONSUMER PRICE INDEX – JULY 2018

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent in
 July on a seasonally adjusted basis after rising 0.1 percent in June, the U.S.
 Bureau of Labor Statistics reported today. Over the last 12 months, the all items
 index rose 2.9 percent before seasonal adjustment.

 The index for shelter rose 0.3 percent in July and accounted for nearly 60 percent
 of the seasonally adjusted monthly increase in the all items index. The food index
 rose slightly in July, with major grocery store food group indexes mixed. The
 energy index fell 0.5 percent, as all the major component indexes declined. 

 The index for all items less food and energy rose 0.2 percent in July, the same
 increase as in May and June. Along with the shelter index, the indexes for used
 cars and trucks, airline fares, new vehicles, household furnishings and operations,
 and recreation all increased. The indexes for medical care and for apparel both
 declined in July. 
 
 The all items index rose 2.9 percent for the 12 months ending July, the same
 increase as for the period ending June. The index for all items less food and
 energy rose 2.4 percent for the 12 months ending July; this was the largest
 12-month increase since the period ending September 2008. The food index increased
 1.4 percent over the last 12 months, and the energy index rose 12.1 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.
                              Jan.  Feb.  Mar.  Apr.  May   June  July   ended 
                              2018  2018  2018  2018  2018  2018  2018   July  
                                                                         2018  
                                                                               
                                                                               
 All items..................    .5    .2   -.1    .2    .2    .1    .2      2.9
  Food......................    .2    .0    .1    .3    .0    .2    .1      1.4
   Food at home.............    .1   -.2    .1    .3   -.2    .2    .2       .4
   Food away from home (1)..    .4    .2    .1    .2    .3    .2    .1      2.8
  Energy....................   3.0    .1  -2.8   1.4    .9   -.3   -.5     12.1
   Energy commodities.......   5.8   -.9  -4.7   3.0   1.6    .6   -.6     25.4
    Gasoline (all types)....   5.7   -.9  -4.9   3.0   1.7    .5   -.6     25.4
    Fuel oil................   9.5  -3.6   -.7   2.7   -.7   2.9   1.2     34.7
   Energy services..........   -.8   1.4   -.2   -.5   -.1  -1.5   -.4     -1.0
    Electricity.............   -.2    .4    .0   -.6    .1  -1.4   -.4      -.8
    Utility (piped) gas                                                        
       service..............  -2.6   4.7  -1.2   -.4   -.6  -1.7   -.5     -1.3
  All items less food and                                                      
     energy.................    .3    .2    .2    .1    .2    .2    .2      2.4
   Commodities less food and                                                   
      energy commodities....    .4    .1   -.1   -.1   -.1    .0    .1       .0
    New vehicles............   -.1   -.5    .0   -.5    .3    .4    .3       .2
    Used cars and trucks....    .4   -.3   -.3  -1.6   -.9    .7   1.3       .8
    Apparel.................   1.7   1.5   -.6    .3    .0   -.9   -.3       .3
    Medical care commodities   -.1   -.3    .1   -.2   1.3    .2  -1.1       .4
   Services less energy                                                        
      services..............    .3    .2    .3    .2    .3    .2    .3      3.1
    Shelter.................    .2    .2    .4    .3    .3    .1    .3      3.5
    Transportation services     .8   1.0    .2   -.4    .0    .2    .5      4.0
    Medical care services...    .6    .0    .5    .2   -.1    .5    .1      2.3

   1 Not seasonally adjusted.



 Food

 The food index rose 0.1 percent in July after increasing 0.2 percent in June. The
 index for food away from home rose 0.1 percent, while the index for food at home
 rose 0.2 percent in July, the same increase as the prior month. Three of the six
 major grocery store food group indexes increased, with the index for fruits and
 vegetables rising 1.0 percent as the index for fresh vegetables rose 1.9 percent.
 The index for meats, poultry, fish, and eggs increased 0.3 percent and the index
 for other food at home advanced 0.1 percent.

 In contrast, the index for dairy and related products fell 0.6 percent in July
 after rising 0.7 percent in June. The index for cereals and bakery products also
 declined in July, falling 0.2 percent after rising in June. The index for
 nonalcoholic beverages was unchanged in July.

 The food at home index increased 0.4 percent over the past year. Four of the six
 major grocery store food group indexes rose over the span; the index for meats,
 poultry, fish, and eggs and the fruits and vegetables index both rose 0.9 percent
 over the last 12 months, the largest increases among the groups. The indexes for
 dairy and related products and nonalcoholic beverages both declined over the past
 year. The index for food away from home increased 2.8 percent over the past
 12 months.    

 Energy

 The energy index fell 0.5 percent in July after declining 0.3 percent in June. The
 indexes for gasoline, natural gas, and electricity all declined modestly in July.
 The gasoline index fell 0.6 percent in July after rising 0.5 percent in June.
 (Before seasonal adjustment, gasoline prices decreased 1.4 percent in July.) The
 electricity index fell 0.4 percent, and the index for natural gas fell 0.5 percent,
 its fifth consecutive decline.

 The energy index increased 12.1 percent over the past year, as the gasoline index
 increased 25.4 percent. The index for fuel oil increased 34.7 percent over the last
 year. In contrast, the electricity index fell 0.8 percent, and the natural gas
 index declined 1.3 percent.   

 All items less food and energy

 The index for all items less food and energy increased 0.2 percent in July. The
 shelter index rose 0.3 percent in July following a 0.1-percent increase in June.
 The indexes for rent and owners' equivalent rent both rose 0.3 percent, the same
 increase as in June. The index for lodging away from home increased 0.4 percent
 in July after falling in June. The index for used cars and trucks increased
 1.3 percent in July, and the index for airline fares increased 2.7 percent after
 falling in each of the prior 3 months. The new vehicles index rose 0.3 percent,
 its third consecutive increase. The index for household furnishings and
 operations also rose in July, advancing 0.3 percent, and the recreation index
 rose 0.2 percent.   

 The medical care index declined in July, falling 0.2 percent. The index for
 prescription drugs fell 1.0 percent in July after rising in each of the last
 3 months, and the physicians' services index fell 0.2 percent. In contrast,
 the hospital services index rose 0.4 percent in July. The apparel index declined
 in July, falling 0.3 percent, and the index for personal care was unchanged.   

 The index for all items less food and energy rose 2.4 percent over the past
 12 months, the largest 12-month increase since the period ending September 2008.
 The shelter index rose 3.5 percent over the last 12 months, and the medical care
 index rose 1.9 percent. The indexes for used cars and trucks, apparel,
 recreation, and new vehicles all posted increases of less than 1.0 percent over
 the past year. 

 Not seasonally adjusted CPI measures

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.9 percent
 over the last 12 months to an index level of 252.006 (1982-84=100). For the
 month, the index was unchanged prior to seasonal adjustment.  

 The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
 increased 3.2 percent over the last 12 months to an index level of 246.155
 (1982-84=100). For the month, the index was unchanged prior to seasonal
 adjustment.  

 The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased
 2.7 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 August 2018 is scheduled to be released on
 Thursday, September 13, 2018, at 8:30 a.m. (EDT).





 Technical Note

 Brief Explanation of the CPI

 The Consumer Price Index (CPI) measures the change in prices paid by consumers
 for goods and services. The CPI reflects spending patterns for each of two
 population groups: all urban consumers and urban wage earners and clerical
 workers. The all urban consumer group represents about 93 percent of the total
 U.S. population. It is based on the expenditures of almost all residents of
 urban or metropolitan areas, including professionals, the self-employed, the
 poor, the unemployed, and retired people, as well as urban wage earners and
 clerical workers. Not included in the CPI are the spending patterns of people
 living in rural nonmetropolitan areas, farming families, people in the Armed
 Forces, and those in institutions, such as prisons and mental hospitals.
 Consumer inflation for all urban consumers is measured by two indexes, namely,
 the Consumer Price Index for All Urban Consumers (CPI-U) and the Chained
 Consumer Price Index for All Urban Consumers (C-CPI-U).
 
 The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
 is based on the expenditures of households included in the CPI-U definition
 that meet two requirements: more than one-half of the household's income must
 come from clerical or wage occupations, and at least one of the household's
 earners must have been employed for at least 37 weeks during the previous
 12 months. The CPI-W population represents about 29 percent of the total U.S.
 population and is a subset of the CPI-U population.

 The CPIs are based on prices of food, clothing, shelter, fuels, transportation,
 doctors’ and dentists’ services, drugs, and other goods and services that
 people buy for day-to-day living. Prices are collected each month in 75 urban
 areas across the country from about 5,000 housing units and approximately
 22,000 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 75 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 by the Bureau’s trained representatives.

 In calculating the index, price changes for the various items in each location
 are aggregated using 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 23 selected 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. The CPI-U and CPI-W are
 considered final when released, but the C-CPI-U is issued in preliminary form
 and subject to three subsequent quarterly revisions.
 
 The index measures price change from a designed reference date. For most of 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 7 percent from
 the reference base, for example, is shown as 107.000. Alternatively, that
 relationship can also be expressed as the price of a base period market basket
 of goods and services rising from $100 to $107.
 
 Sampling Error in the CPI

 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 0.03 percent for the U.S. all items CPI. 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 percent
 of these estimates will be within 0.06 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-U, we are 95 percent confident that the actual
 percent change based on all retail prices would fall between 0.14 and
 0.26 percent. For the latest data, including information on how to use the
 estimates of standard error,
 see https://www.bls.gov/cpi/tables/variance-estimates/home.htm.
 
 Calculating Index Changes

 Movements of the indexes from 1 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 following
 table shows an example of using index values to calculate percent changes:

              
                                 Item A                    Item B                    Item C
 Year I                         112.500                   225.000                   110.000
 Year II                        121.500                   243.000                   128.000
 Change in index points           9.000                    18.000                    18.000
 Percent change 9.0/112.500 x 100 = 8.0  18.0/225.000 x 100 = 8.0 18.0/110.000 x 100 = 16.4
 
 
 
 Use of Seasonally Adjusted and Unadjusted Data

 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 5 years of seasonally adjusted data. For more information on data
 revision scheduling, please see the Factsheet on Seasonal Adjustment
 at www.bls.gov/cpi/seasonal-adjustment/questions-and-answers.htm
 and the Timeline of Seasonal Adjustment Methodological Changes
 at www.bls.gov/cpi/seasonal-adjustment/timeline-seasonal-adjustment-methodology-changes.htm.
 
 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 weather events,
 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.
 
 For example, this procedure was used for the motor fuel series to offset the effects of the 2009
 return to normal pricing after the worldwide economic downturn in 2008. Retaining this outlier
 data during seasonal factor calculation would distort the computation of the seasonal portion of
 the time series data for motor fuel, so it was estimated and removed from the data prior to
 seasonal adjustment. Following that, seasonal factors were calculated based on this “prior adjusted”
 data. These seasonal factors represent a clearer picture of the seasonal pattern in the data. The
 last step is for motor fuel seasonal factors to be applied to the unadjusted data.

 For the seasonal factors introduced in January 2018, BLS adjusted 38 series using intervention
 analysis seasonal adjustment, including selected food and beverage items, motor fuels, and
 natural gas.
 
 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 5 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 5 years
 of data. Seasonally adjusted indexes beyond the last 5 years of data are considered to be final
 and not subject to revision. In January 2018, revised seasonal factors and seasonally adjusted
 indexes for 2013 to 2017 were calculated and published. For series which are directly adjusted
 using the Census X-13ARIMA-SEATS seasonal adjustment software, the seasonal factors for 2017
 will be applied to data for 2018 to produce the seasonally adjusted 2018 indexes. Series which
 are indirectly seasonally adjusted by summing seasonally adjusted component series have seasonal
 factors which are derived and are therefore not available in advance.
 
 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 5 years, but the seasonally adjusted
 indexes before that period will not be changed. Twenty-nine of the 81 components of the
 U.S. city average all items index are not seasonally adjusted for 2018.

 Contact Information

 For additional information about the CPI visit www.bls.gov/cpi or contact the CPI Information
 and Analysis Section at 202-691-7000 or cpi_info@bls.gov.
 
 For additional information on seasonal adjustment in the CPI visit
 https://www.bls.gov/cpi/seasonal-adjustment/home.htm or contact the CPI seasonal adjustment
 section at 202-691-6968 or cpiseas@bls.gov.
 
 Information from this release will be made available to sensory impaired individuals upon request.
 Voice phone: 202-691-5200; Federal Relay Service: 1-800-877-8339.