Transmission of material in this release is embargoed until                                        
 8:30 a.m. (EST) November 17, 2016              USDL-16-2166

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

 CONSUMER PRICE INDEX – OCTOBER 2016

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent
 in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics
 reported today. Over the last 12 months, the all items index rose 1.6 percent
 before seasonal adjustment.

 As in September, increases in the shelter and gasoline indexes were the main
 causes of the rise in the all items index. The gasoline index rose 7.0 percent
 in October and accounted for more than half of the increase in the all items
 index. The shelter index increased 0.4 percent for the second straight month. 

 The energy index increased 3.5 percent, its largest advance since February 2013.
 The indexes for fuel oil and gasoline were up 5.9 percent and 7.0 percent,
 respectively, while the indexes for electricity and natural gas saw relatively
 smaller increases of 0.4 percent and 0.9 percent. In contrast, the index for
 food was unchanged for the fourth consecutive month, as the food at home index
 continued to decline.

 The index for all items less food and energy rose 0.1 percent for the second
 straight month. Along with the shelter index, the indexes for apparel, new
 vehicles, and motor vehicle insurance all increased in October, as did the
 indexes for education, household furnishings and operations, alcoholic
 beverages, and tobacco. The indexes for personal care, communication, used cars
 and trucks, recreation, and airfare all declined. The medical care index was
 flat over the month.

 The all items index rose 1.6 percent for the 12 months ending October, its
 largest 12-month increase since October 2014. The index for all items less food
 and energy rose 2.1 percent for the 12 months ending October. The food index
 declined 0.4 percent over the span, while the energy index rose 0.1 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.
                              Apr.  May   June  July  Aug.  Sep.  Oct.   ended 
                              2016  2016  2016  2016  2016  2016  2016   Oct.  
                                                                         2016  
                                                                               
                                                                               
 All items..................    .4    .2    .2    .0    .2    .3    .4      1.6
  Food......................    .2   -.2   -.1    .0    .0    .0    .0      -.4
   Food at home.............    .1   -.5   -.3   -.2   -.2   -.1   -.2     -2.3
   Food away from home (1)..    .2    .2    .2    .2    .2    .2    .1      2.4
  Energy....................   3.4   1.2   1.3  -1.6    .0   2.9   3.5       .1
   Energy commodities.......   7.8   2.4   3.3  -4.4   -.9   5.5   6.7      -.9
    Gasoline (all types)....   8.1   2.3   3.3  -4.7   -.9   5.8   7.0      -.9
    Fuel oil (1)............   1.9   6.2   3.3  -1.3  -2.5   2.4   5.9     -2.1
   Energy services..........   -.1    .2   -.5   1.0    .8    .7    .5      1.3
    Electricity.............   -.3   -.2   -.5    .5    .5    .7    .4       .4
    Utility (piped) gas                                                        
       service..............    .6   1.7   -.4   3.1   2.1    .8    .9      4.8
  All items less food and                                                      
     energy.................    .2    .2    .2    .1    .3    .1    .1      2.1
   Commodities less food and                                                   
      energy commodities....   -.1   -.2   -.3   -.1    .1   -.1    .1      -.5
    New vehicles............   -.3   -.1   -.2    .2    .0   -.1    .2       .3
    Used cars and trucks....   -.3  -1.3  -1.1  -1.0   -.6   -.3   -.1     -4.1
    Apparel.................   -.3    .8   -.4    .0    .2   -.7    .3       .7
    Medical care commodities    .5   -.4    .8    .5   1.4    .6    .1      5.0
   Services less energy                                                        
      services..............    .3    .3    .3    .2    .3    .2    .2      3.0
    Shelter.................    .3    .4    .3    .2    .3    .4    .4      3.5
    Transportation services     .7    .3    .3   -.2    .1    .0   -.2      2.6
    Medical care services...    .3    .5    .2    .5   1.0    .0    .0      4.1

   1 Not seasonally adjusted.



 Food

 The food index was unchanged in October, as it was the previous 3 months. The
 index for food away from home increased 0.1 percent, while the food at home
 index fell 0.2 percent, its sixth consecutive monthly decline. Major grocery
 store food group indexes were mixed, with three declines, two increases, and
 one category unchanged. The index for nonalcoholic beverages fell 0.4 percent,
 its fifth decrease in the last 6 months. The index for meats, poultry, fish,
 and eggs declined for the fourteenth consecutive month, falling 0.7 percent.
 The index for other food at home fell 0.1 percent, after increasing 0.1 percent
 in September. The index for cereals and bakery products was unchanged in October.
 The fruits and vegetables index rose 0.2 percent, and the index for dairy and
 related products increased 0.3 percent.

 Over the last 12 months, the food at home index has declined 2.3 percent, the
 largest 12-month decline since December 2009. As in September, all six major
 grocery store food group indexes declined over the last year. The index for
 food away from home rose 2.4 percent over the last 12 months. 

 Energy

 The energy index increased 3.5 percent in October after rising 2.9 percent
 in September. It was the largest 1-month increase in the energy index since
 February 2013, as all major energy component indexes increased. The gasoline
 index rose 7.0 percent after a 5.8-percent increase in September. (Before
 seasonal adjustment, gasoline prices increased 1.8 percent in October.) The
 fuel oil index also increased in October, rising 5.9 percent after increasing
 2.4 percent in September. The electricity index rose 0.4 percent in October,
 its fourth straight increase. The index for natural gas also continued to rise,
 increasing 0.9 percent in October. 

 The energy index increased 0.1 percent over the last 12 months; though slight,
 this is the first 12-month increase since August 2014. The gasoline index has
 declined 0.9 percent over the last year, the smallest 12-month change since
 July 2014. However, the index for natural gas has risen 4.8 percent over the
 past year, and the electricity index has advanced slightly, increasing
 0.4 percent.  

 All items less food and energy

 The index for all items less food and energy increased 0.1 percent for the second
 consecutive month in October. The shelter index increased 0.4 percent in October,
 reflecting a 0.4-percent increase in the rent index and a 0.3-percent advance in
 the index for owners' equivalent rent. The index for motor vehicle insurance has
 risen for 12 consecutive months, increasing 0.2 percent in October. The index for
 tobacco also increased, up 0.3 percent, while the alcoholic beverages index rose
 0.4 percent. The apparel index rose 0.3 percent, the index for household
 furnishings and operations increased 0.1 percent, and the new vehicles index
 increased 0.2 percent. The education index advanced 0.5 percent over the month.

 In contrast to these increases, several indexes declined in October. The
 recreation index was down 0.1 percent for the fourth consecutive month. The
 personal care index declined 0.1 percent in October, its first decline since July
 2015. The index for used cars and trucks fell 0.1 percent, its eighth straight
 monthly decline. The index for airline fares fell 2.2 percent, and the
 communication index was down 0.5 percent. 

 The index for medical care was unchanged. The index for prescription drugs rose
 0.2 percent in October after increasing 0.8 percent in September and 1.7 percent
 in August. The index for hospital services was up 0.2 percent in October, while
 the index for physician services was down 0.1 percent.

 The index for all items less food and energy increased 2.1 percent over the past
 12 months (it has remained in the narrow range of 2.1 percent to 2.3 percent since
 December 2015). The shelter index has risen 3.5 percent over the last 12 months,
 and the medical care index has increased 4.3 percent. The index for used cars and
 trucks has declined 4.1 percent over the year. The tobacco index rose 3.5 percent
 over the last 12 months, while the index for alcoholic beverages rose 1.3 percent.
  

 Not seasonally adjusted CPI measures

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.6 percent over
 the last 12 months to an index level of 241.729 (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
 1.4 percent over the last 12 months to an index level of 235.732 (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
 1.5 percent over the last 12 months. For the month, the index rose 0.1 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 November 2016 is scheduled to be released on Thursday,
 December 15, 2016, at 8:30 a.m. (EST). 

 ----------------------------------------------------------------------------------------
                    Consumer Price Index Geographic Revision for 2018

 In January 2018, BLS will introduce a new geographic area sample for the Consumer Price
 Index (CPI). The 2018 revision utilizes the 2010 Decennial Census and incorporates an
 updated area sample design, changes the frequency of publication for several local area
 indexes, and establishes some new local area and aggregate indexes. The first indexes
 using the new structure will be published in February 2018. Additional information on
 the geographic revision is available at: www.bls.gov/cpi/georevision2018.htm.
 ---------------------------------------------------------------------------------------- 




 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 contact us at (202) 691-6968
 or cpiseas@bls.gov. If you have general questions about the CPI, please contact our information
 staff at (202) 691-7000 or cpi_info@bls.gov.