The Consumer Price Index for All Urban Consumers (CPI-U) in the Pittsburgh area advanced 1.6 percent from the first half of 2015 to the first half of 2016, the U.S. Bureau of Labor Statistics reported today. Sheila Watkins, the Bureau’s regional commissioner, noted that this was mostly due to a 2.8-percent rise in the all items less food and energy index. (See chart 1.) The food index also increased since the first half of 2015, up 0.6 percent. These over-the-year increases were moderated by a 9.6-percent decline in the energy index.

Food

Food prices advanced 0.6 percent since the first half of 2015, led by a 1.3-percent increase in prices for food away from home. Prices for food at home were unchanged over the year.

Energy

The energy index, which includes prices for household and transportation fuels, fell 9.6 percent from the first half of 2015 to the first half of 2016, due largely to a 15.0-percent drop in gasoline prices. Prices for utility (piped) gas service declined 17.7 percent, while prices for electricity increased 5.2 percent over the year.

All items less food and energy

Over the year, the index for all items less food and energy increased 2.8 percent. Price increases were led by shelter, up 2.4 percent, particularly the owners’ equivalent rent of residences component, which rose 2.6 percent. Prices were also higher for several other categories including apparel (14.7 percent), other goods and services (6.6 percent), and recreation (4.0 percent).

The Consumer Price Index for the second half of 2016 is scheduled to be released in January, 2017.

Technical Note

The Consumer Price Index (CPI) is a measure of the average change in prices over time in a fixed market basket of goods and services. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) a CPI for All Urban Consumers (CPI-U) which covers approximately 89 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers approximately 28 percent of the total population. The CPI-U includes, in addition to wage earners and clerical workers, 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 CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and the other goods and services that people buy for day-to-day living. Each month, prices are collected in 87 urban areas across the country from about 4,000 housing units and approximately 26,000 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.

The index measures price changes from a designated reference date (1982-84) that equals 100.0. An increase of 16.5 percent, for example, is shown as 116.5. 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 see the CPI home page on the Internet at www.bls.gov/cpi and the BLS Handbook of Methods, Chapter 17, The Consumer Price Index, available on the Internet at www.bls.gov/opub/hom/pdf/homch17.pdf.

In calculating the index, price changes for the various items in each location are averaged together with weights that represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. Because the sample size of a local area is smaller, the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index, although their long-term trends are quite similar. Note: Area indexes do not measure differences in the level of prices between cities; they only measure the average change in prices for each area since the base period.

The Pittsburgh, Pa. metropolitan statistical area covered in this release is comprised of Allegheny, Armstrong, Beaver, Butler, Fayette, Washington, and Westmoreland Counties in Pennsylvania.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: (202) 691-5200; Federal Relay Service: (800) 877-8339.