The Consumer Price Index for All Urban Consumers (CPI-U) for the Denver-Boulder-Greeley, Colo., metropolitan area increased 2.7 percent from the second half of 2013 to the second half of 2014, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Stanley W. Suchman noted that higher costs for shelter (5.1 percent) were largely responsible for the overall increase. Costs for energy were up 0.3 percent, food prices rose 3.3 percent, and the all items less food and energy index advanced 2.9 percent.

Food

Food prices rose 3.3 percent from the second half of 2013 to the second half of 2014, compared to a 0.2-percent gain in the same period one year ago. The index for food at home increased 3.5 percent and costs for food away from home were 3.8 percent higher over the year. Comparatively, from the second half of 2012 to the second half of 2013, prices for food at home were down 0.2 percent while costs for food away from home rose 0.7 percent.

Energy

The energy index, which includes motor fuel and household fuels, increased 0.3 percent from the second half of 2013 to the second half of 2014, following a gain of 3.2 percent in the same period one year ago. Higher prices for electricity (3.8 percent) and utility (piped) gas service (5.8 percent) contributed to the increase. During the same period one year ago, these indexes rose 8.5 and 25.8 percent, respectively. The rise in the energy index was moderated by lower motor fuel costs (-3.1 percent) from the second half of 2013 to the second half of 2014, with all of the decline in motor fuel prices occurring in the most recent six months of the period.

All items less food and energy

The index for all items less food and energy rose 2.9 percent from the second half of 2013 to the second half of 2014. Shelter costs had the greatest upward impact with an increase of 5.1 percent after rising 4.9 percent in the same period one year ago. In contrast, the index for apparel (-4.1 percent) was among the expenditure categories registering lower prices over the year.

The Denver CPI-U stood at 238.664 for the second half of 2014. This means that a market basket of goods and services that cost $100.00 during the 1982-84 base period cost $238.66 during the second half of 2014. Because metropolitan area CPI data are not adjusted for seasonal price variation, consumers and businesses should be cautious in drawing conclusions about long-term retail price trends from short-term changes in the area indexes.

CPI-W

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Denver-Boulder-Greeley, Colo., metropolitan area for the second half of 2014 was 229.076. The CPI-W increased 2.7 percent from the second half of 2013 to the second half of 2014.

The Consumer Price Index for the First Half of 2015 is scheduled to be released on Wednesday, August 19, 2015.

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 88 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 29 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/cpi/.

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 areas; they only measure the average change in prices for each area since the base period.

The Denver-Boulder-Greeley, Colo., Metropolitan Statistical Area includes Adams, Arapahoe, Boulder, Broomfield, Denver, Douglas, Jefferson, and Weld Counties in Colorado.

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