Transmission of material in this release is embargoed until                                        
 8:30 a.m. (EDT) August 16, 2016                USDL-16-1684

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

 (Note: The indexes for Prescription drugs were incorrect as published for May
 2016 through August 2016, which affected the U.S. All items index. Incorrect
 prices were used in the calculation of indexes in several local areas. A list
 of the series affected by the errors can be found at
 www.bls.gov/bls/errata/cpi-price-corrections-10182016.htm and the corrected
 data are available in the CPI database.) 

 CONSUMER PRICE INDEX – JULY 2016

 The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in July
 on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported
 today. Over the last 12 months, the all items index rose 0.8 percent before
 seasonal adjustment.

 The energy index declined in July and the food index was unchanged. The index
 for all items less food and energy rose, but posted its smallest increase since
 March. As a result, the all items index was unchanged after rising in each of
 the 4 previous months. 

 The energy index fell 1.6 percent after rising in each of the last four months.
 The decline was due to a sharp decrease in the gasoline index; other energy
 indexes were mixed. The food at home index declined 0.2 percent as four of the
 six major grocery store food group indexes decreased, while the index for food
 away from home rose 0.2 percent.

 The index for all items less food and energy increased 0.1 percent in July after
 rising 0.2 percent in June. The shelter index rose 0.2 percent, its smallest
 increase since March, and the indexes for medical care, new vehicles, and motor
 vehicle insurance also rose. In contrast, the indexes for airline fares, used
 cars and trucks, communication, and recreation were among those that declined
 in July.
 

 The all items index rose 0.8 percent for the 12 months ending July, a smaller
 increase than the 1.0 percent rise for the 12 months ending June. Similarly,
 the index for all items less food and energy rose 2.2 percent for the 12 months
 ending July, a smaller increase than the 2.3 percent rise for the 12 months
 ending June.

 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 
                              2016  2016  2016  2016  2016  2016  2016   July  
                                                                         2016  
                                                                               
                                                                               
 All items..................    .0   -.2    .1    .4    .2    .2    .0       .8
  Food......................    .0    .2   -.2    .2   -.2   -.1    .0       .2
   Food at home.............   -.2    .2   -.5    .1   -.5   -.3   -.2     -1.6
   Food away from home (1)..    .3    .1    .2    .2    .2    .2    .2      2.8
  Energy....................  -2.8  -6.0    .9   3.4   1.2   1.3  -1.6    -10.9
   Energy commodities.......  -4.8 -12.5   1.9   7.8   2.4   3.3  -4.4    -19.4
    Gasoline (all types)....  -4.8 -13.0   2.2   8.1   2.3   3.3  -4.7    -19.9
    Fuel oil (1)............  -6.5  -2.9   1.7   1.9   6.2   3.3  -1.3    -17.8
   Energy services..........   -.7    .1    .2   -.1    .2   -.5   1.0      -.9
    Electricity.............   -.7   -.2    .4   -.3   -.2   -.5    .5     -1.0
    Utility (piped) gas                                                        
       service..............   -.6   1.0   -.7    .6   1.7   -.4   3.1      -.4
  All items less food and                                                      
     energy.................    .3    .3    .1    .2    .2    .2    .1      2.2
   Commodities less food and                                                   
      energy commodities....    .2    .3   -.2   -.1   -.2   -.2   -.1      -.6
    New vehicles............    .3    .2    .0   -.3   -.1   -.2    .2       .0
    Used cars and trucks....    .1    .2   -.1   -.3  -1.3  -1.1  -1.0     -3.7
    Apparel.................    .6   1.6  -1.1   -.3    .8   -.4    .0       .3
    Medical care commodities    .4    .6    .3    .5   -.2   1.1    .4      3.6
   Services less energy                                                        
      services..............    .3    .3    .2    .3    .3    .3    .2      3.1
    Shelter.................    .3    .3    .2    .3    .4    .3    .2      3.3
    Transportation services     .4    .2    .2    .7    .3    .3   -.2      3.0
    Medical care services...    .5    .5    .1    .3    .5    .2    .5      4.1

   1 Not seasonally adjusted.





 Consumer Price Index Data for July 2016

 Food

 The food index was unchanged in July after falling in May and June. The index for
 food at home fell 0.2 percent in July, its seventh decline in the last 9 months.
 Four of the six major grocery store food group indexes decreased. The index for
 meats, poultry, fish, and eggs continued to fall, declining 0.6 percent after a
 0.7 percent decrease in June. The dairy and related products index fell 0.4
 percent, and the indexes for cereals and bakery products and other food at home
 both fell 0.2 percent. The index for fruits and vegetables, however, turned up
 in July, rising 0.3 percent as the indexes for fresh fruits and fresh vegetables
 both increased. The index for nonalcoholic beverages also increased 0.3 percent
 in July after falling in June. 

 The food index has risen 0.2 percent over the past year, its smallest 12-month
 increase since the period ending March 2010. The food at home index has declined
 1.6 percent over the last 12 months, with the index for meats, poultry, fish,
 and eggs falling 5.6 percent over the span. The dairy and related products index
 fell 3.1 percent, and the indexes for cereals and bakery products and for
 nonalcoholic beverages also declined. In contrast, the food away from home index
 has risen 2.8 percent over the past 12 months, and increased 0.2 percent in July.   

 Energy

 The energy index declined 1.6 percent in July after rising 6.1 percent over the
 previous 3 months. The downturn was due to the gasoline index, which fell 4.7
 percent in July after rising in each of the previous 4 months. (Before seasonal
 adjustment, gasoline prices decreased 5.5 percent in July.) The fuel oil index
 also turned down in July, falling 1.3 percent after increasing in recent months.
 In contrast to these declines, the index for natural gas increased 3.1 percent
 in July, its largest increase since March 2014. The electricity index also rose,
 advancing 0.5 percent after falling 0.5 percent in June. 

 The energy index has declined 10.9 percent over the past year, with all of its
 major component indexes falling over the period. The fuel oil and gasoline
 indexes have declined substantially, falling 17.8 percent and 19.9 percent,
 respectively. The electricity and natural gas indexes have decreased modestly,
 with the electricity index falling 1.0 percent and the index for natural gas
 falling 0.4 percent.
 
 All items less food and energy

 The index for all items less food and energy increased 0.1 percent in July after
 rising 0.2 percent in June. The shelter index increased 0.2 percent in July
 following a 0.4 percent rise in May and a 0.3 percent increase in June. The
 indexes for rent and owners' equivalent rent both increased 0.3 percent in July,
 while the index for lodging away from home turned down, falling 2.4 percent after
 increasing in May and June. The medical care index rose 0.5 percent in July, as
 the prescription drugs index rose 0.9 percent, the index for physicians' services
 advanced 0.7 percent, and the hospital services index increased 0.4 percent. The
 new vehicles index turned up in July, rising 0.2 percent, its first increase
 since February. The index for motor vehicle insurance continued to rise,
 increasing 0.4 percent in July, its ninth consecutive increase. The personal care
 index rose 0.2 percent, and the index for household furnishings and operations
 rose 0.1 percent in July after declining in each of the last 4 months.

 In contrast to these increases, an array of indexes posted declines in July. The
 index for airline fares declined 4.9 percent after rising in June. The index for
 used cars and trucks continued to decrease, falling 1.0 percent; this was its
 third consecutive decline of 1.0 percent or more. The tobacco index fell 0.5
 percent after rising 0.6 percent in June. A number of indexes posted smaller
 declines. The communication index fell 0.2 percent and the indexes for recreation,
 education, and alcoholic beverages all declined 0.1 percent. The index for apparel
 was unchanged in July.   
   
 The index for all items less food and energy increased 2.2 percent over the past
 12 months. The shelter index has risen 3.3 percent over this span, and the medical
 care index has increased 4.0 percent. The motor vehicle insurance index has
 increased 6.3 percent over the past year. In contrast, the index for airline fares
 has fallen 4.6 percent and the used cars and trucks index has declined 3.7 percent. 

 Not seasonally adjusted CPI measures

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.8 percent over
 the last 12 months to an index level of 240.647 (1982-84=100). For the month, the
 index decreased 0.2 percent prior to seasonal adjustment.  

 The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
 increased 0.4 percent over the last 12 months to an index level of 234.789
 (1982-84=100). For the month, the index decreased 0.2 percent prior to seasonal
 adjustment.  

 The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.5
 percent over the last 12 months. For the month, the index fell 0.2 percent 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 2016 is scheduled to be released on Friday,
 September 16, 2016, at 8:30 a.m. (EDT). 



















 Facilities for Sensory Impaired

 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.