The Consumer Price Index for All Urban Consumers (CPI-U) for Washington-Baltimore decreased 0.1 percent over the last two months, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Sheila Watkins noted the decline was due to a 0.3-percent decrease in the all items less food and energy index. The energy index and food index both increased since May, up 2.9 percent and 0.2 percent, respectively. (Data in this report are not seasonally adjusted. Accordingly, month-to-month changes may reflect the impact of seasonal influences.)

Over the last 12 months, the CPI-U increased 1.4 percent, due mostly to a 1.9-percent rise in the all items less food and energy index. (See chart 1 and table A.) Since July 2015, the food index rose 1.6 percent, while the energy index fell 5.5 percent. (See table 1.)

Food

After increasing 0.1 percent from March to May, the food index edged up 0.2 percent over the last two months. Prices for food away from home rose 1.0 percent over the last two months; those for food at home declined 0.5 percent. Lower prices for carbonated drinks and lettuce contributed to the decrease in the food at home index.

Food prices rose 1.6 percent over the year, as prices for both components increased. Prices for food away from home advanced 3.0 percent and those for food at home increased 0.5 percent since last July.

Energy

Since May, the energy index, which includes prices for household and transportation fuels, rose 2.9 percent due to higher prices for both electricity and utility (piped) gas service. Electricity prices advanced 4.4 percent, and utility (piped) gas service prices rose 14.0 percent, which was the largest two-month increase for this index in over two years. Prices for gasoline declined over the last two months, down 1.0 percent.

Energy prices fell 5.5 percent over the year, due to a 17.4-percent drop in gasoline prices. Prices increased for both electricity (4.7 percent) and utility (piped) gas service (18.0 percent) since last July.

All items less food and energy

The index for all items less food and energy decreased 0.3 percent since May. The decrease was due largely to lower prices for public transportation (which includes airline fares and inter- and intra-city transportation) and new and used motor vehicles. Moderating the decrease in the all items less food and energy index were higher prices for medical care (0.5 percent) over the last two months.

Since July 2015, the index for all items less food and energy rose 1.9 percent. The increase was due largely to an over-the-year rise in shelter prices (2.0 percent). Higher prices for apparel (15.3 percent), among others, also contributed to the rise.

Table A. Washington, D.C. CPI-U 2-month and 12-month percent changes, all items index, not seasonally adjusted

Month	2012		2013		2014		2015		2016
	2-month	12-month	2-month	12-month	2-month	12-month	2-month	12-month	2-month	12-month
January	0.4	2.7	0.1	1.8	0.4	1.9	-1.0	-0.2	-0.2	1.4
March	1.3	2.8	0.9	1.4	0.6	1.6	1.0	0.2	0.6	1.0
May	0.1	1.8	-0.2	1.2	0.4	2.2	0.6	0.4	0.8	1.2
July	-0.2	1.4	0.5	1.9	0.0	1.7	-0.2	0.2	-0.1	1.4
September	1.3	2.8	0.6	1.2	0.2	1.3	0.5	0.5
November	-0.7	2.1	-0.2	1.7	-0.4	1.2	-0.3	0.6

The Consumer Price Index for September 2016 is scheduled to be released on Tuesday, October 18, 2016, at 8:30 a.m. (EDT).

Technical Note

The Consumer Price Index for Washington-Baltimore is published bi-monthly. 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 Washington-Baltimore, D.C.-Md.-Va.-W.Va., Consolidated Metropolitan Statistical Area includes the District of Columbia; Baltimore City and the counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Frederick, Harford, Howard, Montgomery, Prince George’s, Queen Anne’s, and Washington in Maryland; the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park and the counties of Arlington, Clarke, Culpeper, Fairfax, Fauquier, King George, Loudoun, Prince William, Spotsylvania, Stafford, and Warren in Virginia; and the counties of Berkeley and Jefferson in West Virginia.

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