Consumer Price Index Summary

Transmission of material in this release is embargoed until                                        
8:30 a.m. (EDT) September 14, 2017             USDL-17-1248

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

CONSUMER PRICE INDEX – AUGUST 2017

The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.4 percent in
August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics
reported today. Over the last 12 months, the all items index rose 1.9 percent.

Increases in the indexes for gasoline and shelter accounted for nearly all of
the seasonally adjusted increase in the all items index. The energy index rose
2.8 percent in August as the gasoline index increased 6.3 percent. The shelter
index rose 0.5 percent in August with the rent index up 0.4 percent. The food
index rose slightly in August, with the index for food away from home
increasing and the food at home index declining.

The index for all items less food and energy rose 0.2 percent in August. Along
with the shelter index, the indexes for motor vehicle insurance, medical care,
and recreation all increased in August. The indexes for airline fares and for
used cars and trucks were among those that declined in August.  

The all items index rose 1.9 percent for the 12 months ending August, a larger
increase than the 1.7 percent increase for the 12 months ending July. The
12-month change in the index for all items less food and energy remained at
1.7 percent for the fourth month in a row. It has remained in the range of
1.6 percent to 2.3 percent since June 2011. The energy index rose 6.4 percent
over the past 12 months, and the food index increased 1.1 percent.

_________________________________________________________________________________
                             HURRICANE HARVEY

Hurricane Harvey had a very small effect on survey response rates in August. 
Price collection late in the month was disrupted in 2 of the 87 collection areas.
_________________________________________________________________________________



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.
                              Feb.  Mar.  Apr.  May   June  July  Aug.   ended 
                              2017  2017  2017  2017  2017  2017  2017   Aug.  
                                                                         2017  
                                                                               
                                                                               
 All items..................    .1   -.3    .2   -.1    .0    .1    .4      1.9
  Food......................    .2    .3    .2    .2    .0    .2    .1      1.1
   Food at home.............    .3    .5    .2    .1   -.1    .2   -.2       .3
   Food away from home (1)..    .2    .2    .2    .2    .0    .2    .3      2.2
  Energy....................  -1.0  -3.2   1.1  -2.7  -1.6   -.1   2.8      6.4
   Energy commodities.......  -2.8  -6.0   1.3  -6.2  -2.7    .0   6.1     10.3
    Gasoline (all types)....  -3.0  -6.2   1.2  -6.4  -2.8    .0   6.3     10.4
    Fuel oil (1)............   -.4   -.8   -.3  -2.8  -3.7  -2.0   2.9      9.4
   Energy services..........   1.0   -.3    .9    .7   -.5   -.2   -.1      2.9
    Electricity.............    .8   -.1    .6    .3   -.6    .4    .0      2.3
    Utility (piped) gas                                                        
       service..............   1.5   -.8   2.2   1.9   -.2  -2.3   -.5      5.4
  All items less food and                                                      
     energy.................    .2   -.1    .1    .1    .1    .1    .2      1.7
   Commodities less food and                                                   
      energy commodities....    .0   -.3   -.2   -.3   -.1   -.1   -.1      -.9
    New vehicles............   -.2   -.3   -.2   -.2   -.3   -.5    .0      -.7
    Used cars and trucks....   -.6   -.9   -.5   -.2   -.7   -.5   -.2     -3.8
    Apparel.................    .6   -.7   -.3   -.8   -.1    .3    .1      -.6
    Medical care commodities   -.2    .2   -.8    .4    .7   1.0   -.1      2.4
   Services less energy                                                        
      services..............    .3   -.1    .1    .2    .2    .2    .4      2.5
    Shelter.................    .3    .1    .3    .2    .2    .1    .5      3.3
    Transportation services     .7    .4   -.2    .3    .2    .2    .4      3.5
    Medical care services...    .2    .1    .0   -.1    .3    .3    .2      1.6

   1 Not seasonally adjusted.




Food

The food index rose 0.1 percent in August following a 0.2-percent increase in July.
The index for food at home declined 0.2 percent after rising 0.2 percent the prior
month.  Five of the six major grocery store food group indexes fell, with the indexes
for dairy and related products and for nonalcoholic beverages both declining
0.4 percent. The index for meats, poultry, fish, and eggs fell 0.2 percent, as did the
fruits and vegetables index; both indexes increased in July. The index for other food
at home fell 0.1 percent in August. 

The only major grocery store food group index to rise in August was the index for cereal
and bakery products, which rose 0.3 percent after declining in July. The index for food
away for home also increased, rising 0.3 percent.  

Over the last 12 months, the index for food at home rose 0.3 percent. Four of the six
major grocery store food group indexes increased, but none more than 1.0 percent.
The indexes for cereals and bakery products and for nonalcoholic beverages fell slightly
over the span. The index for food away from home rose 2.2 percent over the last year. 

Energy

The energy index rose 2.8 percent in August, its largest monthly increase since January.
The gasoline index increased 6.3 percent after being unchanged in July. (Before seasonal
adjustment, gasoline prices increased 3.9 percent in August.) However, the index for
natural gas continued to decline, falling 0.5 percent in August after a 2.3-percent decrease
in July. The electricity index was unchanged in August following an increase in July. 

The major energy component indexes all continued to show increases over the past 12 months.
The gasoline index increased 10.4 percent, the index for natural gas rose 5.4 percent, and
the index for electricity advanced 2.3 percent.

All items less food and energy

The index for all items less food and energy increased 0.2 percent in August. The shelter
index was the main contributor to the rise, increasing 0.5 percent, its largest increase
since October 2005. The rent index increased 0.4 percent, and the index for owners'
equivalent rent rose 0.3 percent. The index for lodging away from home rose sharply,
increasing 4.4 percent after decreasing 4.2 percent in July. 

The motor vehicle insurance index continued to rise, increasing 1.0 percent in August.
The recreation index also increased in August, rising 0.2 percent. The medical care index
rose 0.1 percent in August. The index for physicians' services advanced 0.4 percent, and the
hospital services index increased 0.2 percent. The apparel index rose 0.1 percent in August,
as did the indexes for alcoholic beverages and for household furnishings and operations.
The index for new vehicles was unchanged in August after declining in July. 

The index for airline fares, which rose 0.7 percent in July, fell 1.0 percent in August.
The index for used cars and trucks continued to decline, falling 0.2 percent. The indexes
for tobacco, for education, for wireless telephone services, and for personal care all
declined 0.1 percent over the month. 
 
The index for all items less food and energy rose 1.7 percent over the past 12 months.
The index for motor vehicle insurance rose 8.1 percent over the last year. The shelter
index rose 3.3 percent, with the rent index increasing 3.9 percent, the index for owners'
equivalent rent rising 3.3 percent, and the lodging away from home index advancing
0.2 percent. The medical care index rose 1.8 percent. Several indexes declined over the
past 12 months, including those for wireless telephone services (-13.2 percent), used
cars and trucks (-3.8 percent), airline fares (-3.2 percent), new vehicles (-0.7 percent),
and apparel (-0.6 percent).

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.9 percent over
the last 12 months to an index level of 245.519 (1982-84=100). For the month, the
index increased 0.3 percent prior to seasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased
1.9 percent over the last 12 months to an index level of 239.448 (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 1.8 percent
over the last 12 months. For the month, the index increased 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 September 2017 is scheduled to be released on Friday,
October 13, 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. 
 ----------------------------------------------------------------------------------		



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 89 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 28 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 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 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 27 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 www.bls.gov/cpi/cpivar2016.pdf. 

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  8.0/225.000 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 Fact Sheet on Seasonal Adjustment at
www.bls.gov/cpi/cpisaqanda.htm and the Timeline of Seasonal Adjustment Methodological Changes
at www.bls.gov/cpi/cpiseastimeline.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 2017, BLS adjusted 40 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 2017, revised seasonal factors and seasonally adjusted
indexes for 2012 to 2016 were calculated and published. For series which are directly adjusted
using the Census X-13ARIMA-SEATS seasonal adjustment software, the seasonal factors for 2016 will
be applied to data for 2017 to produce the seasonally adjusted 2017 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-seven of the 81 components of the U.S. city average all items index are
not seasonally adjusted for 2017.

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 www.bls.gov/cpi/cpisapage.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.  









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Last Modified Date: September 14, 2017