Consumer Price Index Summary

 Transmission of material in this release is embargoed until                                        
 8:30 a.m. (EDT) March 15, 2017                 USDL-17-0318

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

 CONSUMER PRICE INDEX – FEBRUARY 2017

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent
 in February on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics
 reported today. Over the last 12 months, the all items index rose 2.7 percent
 before seasonal adjustment.

 The February increase was the smallest 1-month rise in the seasonally adjusted
 all items index since July 2016. The gasoline index declined, partially
 offsetting increases in several indexes, including food, shelter, and
 recreation. The energy index fell 1.0 percent, with the decline in gasoline
 outweighing increases in the other energy component indexes. The food index
 increased 0.2 percent over the month, its largest rise since September 2015.

 The index for all items less food and energy rose 0.2 percent in February. The
 indexes for shelter, recreation, apparel, airline fares, motor vehicle
 insurance, education, and medical care were among those that increased in
 February. Indexes that declined include communication, used cars and trucks,
 new vehicles, and household furnishings and operations.  

 The all items index rose 2.7 percent for the 12 months ending February; the
 12-month increase has been trending upward since a July 2016 trough of
 0.8 percent. The index for all items less food and energy rose 2.2 percent
 over the last 12 months; this was the fifteenth straight month the 12-month
 change remained in the range of 2.1 to 2.3 percent. The energy index rose
 15.2 percent over the last year, while the food index was unchanged. 


 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.
                              Aug.  Sep.  Oct.  Nov.  Dec.  Jan.  Feb.   ended 
                              2016  2016  2016  2016  2016  2017  2017   Feb.  
                                                                         2017  
                                                                               
                                                                               
 All items..................    .2    .3    .3    .2    .3    .6    .1      2.7
  Food......................    .0    .0    .0    .0    .0    .1    .2       .0
   Food at home.............   -.2   -.2   -.2   -.1   -.2    .0    .3     -1.7
   Food away from home (1)..    .2    .2    .1    .1    .2    .4    .2      2.4
  Energy....................    .0   2.4   2.5   1.0   1.2   4.0  -1.0     15.2
   Energy commodities.......   -.7   4.4   4.8   2.0   2.4   7.6  -2.8     29.8
    Gasoline (all types)....   -.8   4.6   5.1   2.1   2.4   7.8  -3.0     30.7
    Fuel oil (1)............  -2.5   2.4   5.9  -1.2   6.0   3.5   -.4     28.0
   Energy services..........    .6    .6    .4    .0    .0    .3   1.0      3.8
    Electricity.............    .3    .5    .3    .0    .0    .0    .8      1.9
    Utility (piped) gas                                                        
       service..............   1.5    .8    .9    .2    .1   1.5   1.5     10.9
  All items less food and                                                      
     energy.................    .3    .1    .1    .2    .2    .3    .2      2.2
   Commodities less food and                                                   
      energy commodities....    .1   -.1    .0   -.2    .0    .4    .0      -.5
    New vehicles............    .0    .0    .2    .0    .1    .9   -.2       .5
    Used cars and trucks....   -.5   -.2   -.1    .2    .2   -.4   -.6     -4.3
    Apparel.................    .2   -.5    .2   -.3   -.4   1.4    .6       .4
    Medical care commodities   1.1    .6    .2   -.4    .5    .3   -.2      4.1
   Services less energy                                                        
      services..............    .3    .2    .2    .3    .3    .3    .3      3.1
    Shelter.................    .3    .3    .3    .3    .3    .2    .3      3.5
    Transportation services     .2    .0   -.1    .5    .5    .6    .7      3.6
    Medical care services...    .8    .1    .1    .2    .2    .2    .2      3.4

   1 Not seasonally adjusted.


 
 Food

 The food index rose 0.2 percent in February following a 0.1-percent increase in
 January. The food at home index rose 0.3 percent, its largest advance since
 June 2015. Four of the six major grocery store food group indexes rose in
 February. The index for nonalcoholic beverages increased 1.5 percent, its
 largest increase since January 2011. The index for dairy and related products
 rose 0.8 percent, the same increase as last month. The fruits and vegetables
 index increased 0.7 percent after declining in each of the last 6 months.
 The index for meats, poultry, fish, and eggs rose 0.2 percent in February.

 The indexes for cereals and bakery products and for other food at home both
 declined 0.4 percent in February. The index for food away from home rose
 0.2 percent in February after a 0.4-percent increase in January. Over the last
 12 months the index for food at home fell 1.7 percent, while the food away from
 home index increased 2.4 percent, leaving the overall food index unchanged. 

 
 Energy

 The energy index fell 1.0 percent in February, its first decline since July 
 2016. The gasoline index fell 3.0 percent after a 7.8-percent increase in
 January. (Before seasonal adjustment, gasoline prices decreased 2.1 percent in
 February.) Other major energy component indexes increased in February. The
 index for natural gas rose 1.5 percent, the same increase as last month. The
 electricity index increased 0.8 percent after being unchanged the prior 3
 months.  

 The index for energy increased 15.2 percent over the past year, with all of its
 major components rising. The gasoline index rose 30.7 percent, its largest
 12-month increase since September 2011. The index for natural gas rose
 10.9 percent, and the electricity index advanced 1.9 percent.  


 All items less food and energy

 The index for all items less food and energy increased 0.2 percent in February.
 The shelter index rose 0.3 percent in February, with the indexes for rent and
 owner's equivalent rent both advancing 0.3 percent. The recreation index rose
 0.6 percent in February, its largest increase since April 2001. The apparel
 index also rose 0.6 percent in February. The index for motor vehicle insurance
 continued to rise, increasing 0.5 percent. The index for airline fares also
 continued to increase, rising 2.4 percent following a 2.0-percent increase in
 January. 

 The index for medical care rose 0.1 percent in February. The index for hospital
 services rose 0.4 percent, while the index for prescription drugs declined
 0.2 percent. The education index increased 0.3 percent in February, and the
 index for tobacco advanced 0.4 percent. 

 In contrast to these increases, the communication index fell in February,
 declining 0.6 percent. The index for used cars and trucks also fell 0.6 percent,
 and the index for new vehicles, which rose 0.9 percent in January, declined
 0.2 percent in February. The index for household furnishings and operations
 declined 0.1 percent, as did the index for alcoholic beverages. The index for
 personal care was unchanged in February.   

 The index for all items less food and energy rose 2.2 percent over the past 12
 months. The indexes for shelter and for medical care both increased 3.5 percent
 over the past year. The index for new vehicles increased 0.5 percent, and the
 apparel index rose 0.4 percent. The indexes for used cars and trucks and for airline
 fares both declined over the past 12 months. 


 Not seasonally adjusted CPI measures

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.7 percent
 over the last 12 months to an index level of 243.603 (1982-84=100). For the
 month, the index rose 0.3 percent prior to seasonal adjustment.  

 The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
 increased 2.8 percent over the last 12 months to an index level of 237.477
 (1982-84=100). For the month, the index increased 0.3 percent prior to seasonal
 adjustment.  

 The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased
 2.9 percent over the last 12 months. For the month, the index rose 0.3 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 March 2017 is scheduled to be released on
 Friday, April 14, 2017, at 8:30 a.m. (EDT)


 ----------------------------------------------------------------------------------------
                    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.
 ----------------------------------------------------------------------------------------




 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 (https://www.bls.gov/cpi/cpisaqanda.htm)
 and the Timeline of Seasonal Adjustment Methodological Changes
 (https://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. 

 2017 Series Adjusted Using Intervention Analysis Seasonal Adjustment

 For the seasonal factors introduced in January 2017, BLS adjusted 40 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 2009 return to normal pricing after
 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
 2017, revised seasonal factors and seasonally adjusted indexes for 2012-2016 were
 calculated and published. For directly adjusted series, the seasonal factors for 2016
 will be applied to data for 2017 to produce the seasonally adjusted 2017 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. 27 of the 81 components of the U.S. city average all items index are
 not seasonally adjusted for 2017.

 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
 call our information staff at (202) 691-7000 or cpi_info@bls.gov.
 
 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 0.03 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 0.06 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 for All Urban Consumers, 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 "Variance Estimates for Price Changes in the Consumer Price Index,
 January-December 2016."  These data are available on the CPI home page (www.bls.gov/cpi),
 or by using the following link: www.bls.gov/cpi/cpivar2016.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




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Last Modified Date: March 15, 2017