The Consumer Price Index for All Urban Consumers (CPI-U) for the South decreased 0.4 percent in December, the U.S. Bureau of Labor Statistics reported today. The energy index declined 2.7 percent over the month. The all items less food and energy, and food indexes were little changed in December, down 0.1 and 0.3 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 all items CPI-U rose 0.5 percent. The all items less food and energy index advanced 2.0 percent over the year as several categories within this group recorded increases. (See chart 1.)

Food

The food index declined 0.3 percent in December. Prices for food at home decreased 0.7 percent over the month, while those for food away from home inched up 0.1 percent.

Since December 2014, the food index advanced 0.8 percent, reflecting higher prices for food away from home (2.6 percent). The food at home index declined 0.5 percent over the year.

Energy

The energy index decreased 2.7 percent in December, led by a 5.6-percent decline in motor fuel prices. The electricity and utility (piped) gas service indexes also decreased over the month, down 0.3 and 0.8 percent, respectively.

Over the year, energy prices fell 13.4 percent, reflecting a 22.6-percent drop in motor fuel prices. Prices for electricity (-2.8 percent) and utility (piped) gas service (-11.2 percent) also declined over the year.

All items less food and energy

The all items less food and energy index inched down 0.1 percent in December. A seasonal decline in apparel prices (-4.7 percent), was partially offset by an increase in prices for shelter (0.1 percent) over the month.

Since December 2014, the all items less food and energy index advanced 2.0 percent as several indexes recorded increases, most notably shelter (3.0 percent). Medical care, led by increases in both medical care services (2.7 percent) and medical care commodities (2.8 percent), rose 2.7 percent over the year. Other indexes with over-the-year increases included education and communication (1.9 percent) and other goods and services (1.6 percent).

Table A. South region CPI-U 1-month and 12-month percent changes, all items index, not seasonally adjusted

Month	2011		2012		2013		2014		2015
	1-month	12-month	1-month	12-month	1-month	12-month	1-month	12-month	1-month	12-month
January	0.5	1.7	0.5	3.2	0.4	1.6	0.3	1.7	-0.7	-0.4
February	0.5	2.2	0.6	3.3	0.9	1.8	0.4	1.2	0.5	-0.3
March	1.2	2.8	0.7	2.8	0.3	1.5	0.6	1.5	0.6	-0.3
April	0.7	3.4	0.4	2.5	-0.2	0.9	0.5	2.3	0.3	-0.6
May	0.5	4.0	-0.4	1.6	0.0	1.3	0.2	2.4	0.4	-0.4
June	-0.2	3.8	-0.2	1.7	0.4	1.9	0.2	2.3	0.5	-0.1
July	0.2	4.1	-0.2	1.4	0.2	2.2	-0.1	2.0	-0.1	-0.1
August	0.4	4.3	0.6	1.6	0.1	1.7	-0.2	1.7	-0.2	-0.2
September	0.0	4.1	0.5	2.1	0.0	1.3	0.1	1.7	-0.2	-0.4
October	-0.2	3.7	-0.2	2.1	-0.2	1.3	-0.3	1.6	0.0	-0.1
November	0.0	3.8	-0.5	1.6	-0.3	1.5	-0.6	1.3	-0.2	0.3
December	-0.2	3.3	-0.1	1.7	0.1	1.8	-0.6	0.6	-0.4	0.5

The Consumer Price Index for January 2016 is scheduled to be released on Friday, February 19, 2016.

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 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 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.

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 https://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 South region is comprised of Alabama, Arkansas, Delaware, District of Columbia, Florida, Georgia, Kentucky, Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South Carolina, Tennessee, Texas, Virginia, and West Virginia.

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