The Consumer Price Index for All Urban Consumers (CPI-U) in the Houston area fell 1.2 percent in November and December, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Stanley W. Suchman noted that the decline was primarily the result of falling energy prices, particularly a 20.6-percent drop in gasoline costs. A decrease in the index for all items less food and energy (down 0.3 percent) also contributed, while food prices were unchanged during the period. (Data in this report are not seasonally adjusted. Accordingly, short-term changes may reflect the impact of seasonal influences.)

During the 12 months ended in December 2014, the all items CPI-U advanced 1.1 percent. This was the slowest annual rate of increase since the year ended in April 2013 when prices rose 0.7 percent. Prices for all items less food and energy rose at a 2.3-percent pace. (See chart 1.)

Food

Local food prices were unchanged in November and December, after increasing 0.7 percent in September and October. Movements among the two components of the index were markedly different as prices for food at home (grocery store prices) fell 0.5 percent while prices for food away from home rose 0.7 percent.

From December 2013 to December 2014, the food index advanced 3.2 percent, reflecting the combined effects of a 3.3-percent price rise at grocery stores and a 3.0-percent price rise for food away from home.

Energy

The energy index fell 10.6 percent in November and December, after registering a 4.9-percent decline in September and October. The current decline was primarily the result of a 20.6-percent decrease in gasoline prices. This was the largest negative two-month change for gasoline since November and December 2008 (-47.4 percent). Partially offsetting the gasoline decrease, electricity prices rose 4.8 percent and natural gas costs were unchanged during the period.

During the year ended in December 2014, the energy index decreased 11.1 percent as a result of lower motor fuel costs, as gasoline prices fell 22.9 percent – the fastest annual price decline recorded since the year ended in September 2009 (-31.6 percent). Also contributing to the overall energy decline were lower natural gas prices, down 2.9 percent during the period. In contrast, electricity prices rose 9.7 percent over the year.

All items less food and energy

The index for all items less food and energy fell 0.3 percent in November and December, after rising 0.9 percent in September and October. A 9.1-percent decrease in apparel prices had the greatest impact on the current decline, though a decrease in the index for recreation also contributed (down 0.6 percent). Partially offsetting these declines, prices rose for shelter (0.6 percent), education and communication (0.6 percent), and medical care (0.4 percent).

During the year ended in December 2014, the index for all items less food and energy rose 2.3 percent. The biggest factor by far in the annual increase was a 4.3-percent advance in shelter costs, though higher prices for other goods and services (3.0 percent), education and communication (2.6 percent), and medical care (1.0 percent) also contributed. Countering a portion of these increases, apparel prices fell 9.4 percent over the year.

The February 2015 Consumer Price Index for All Items for Houston-Galveston-Brazoria will be released on March 24, 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 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 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 cities; they only measure the average change in prices for each area since the base period.

The Houston-Galveston-Brazoria, Texas, Consolidated Metropolitan Statistical Area (CMSA) includes Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: 202-691-5200; Federal Relay Service: 1-800-877-8339.

Table 1. Consumer Price Index for All Urban Consumers (CPI-U): Indexes and percent changes for selected periods,
Houston-Galveston-Brazoria, TX (1982-84=100 unless otherwise noted)

Item and Group	Indexes			Percent change from -
	Oct. 2014	Nov. 2014	Dec. 2014	Dec. 2013	Oct. 2014	Nov. 2014
All items	214.791		212.169	1.1	-1.2
All items (1967 = 100)	688.912		680.503
Food and beverages	221.839		221.976	3.0	0.1
Food	221.706		221.813	3.2	0.0
Food at home	224.345	221.201	223.216	3.3	-0.5	0.9
Food away from home	214.266		215.838	3.0	0.7
Alcoholic beverages	213.729		214.319	0.2	0.3
Housing	197.960		199.332	4.3	0.7
Shelter	231.138	231.762	232.496	4.3	0.6	0.3
Rent of primary residence (1)	221.527	223.405	224.652	5.2	1.4	0.6
Owners' equivalent rent of residences (1) (2)	213.904	215.069	216.194	4.0	1.1	0.5
Owners' equivalent rent of primary residence (1) (2)	213.904	215.069	216.194	4.0	1.1	0.5
Fuels and utilities	174.489		179.612	6.2	2.9
Household energy	160.521	158.285	166.783	7.3	3.9	5.4
Energy services (1) (3)	157.542	155.362	163.863	7.5	4.0	5.5
Electricity (1)	157.951	155.332	165.525	9.7	4.8	6.6
Utility (piped) gas service (1)	142.941	142.967	142.955	-2.9	0.0	0.0
Household furnishings and operations	122.678		121.513	3.0	-0.9
Apparel	202.332		184.005	-9.4	-9.1
Transportation	187.543		176.934	-4.9	-5.7
Private transportation	185.978		175.435	-5.0	-5.7
Motor fuel	269.669	246.209	216.116	-22.1	-19.9	-12.2
Gasoline (all types)	269.304	244.924	213.788	-22.9	-20.6	-12.7
Gasoline, unleaded regular (4)	277.012	251.032	218.370	-23.6	-21.2	-13.0
Gasoline, unleaded midgrade (4) (5)	276.724	253.910	224.406	-21.0	-18.9	-11.6
Gasoline, unleaded premium (4)	269.363	250.143	222.083	-18.8	-17.6	-11.2
Medical care	434.273		436.002	1.0	0.4
Recreation (6)	106.633		105.970	1.7	-0.6
Education and communication (6)	123.296		124.057	2.6	0.6
Other goods and services	385.347		385.829	3.0	0.1
COMMODITY AND SERVICE GROUP
Commodities	181.716		174.919	-2.6	-3.7
Commodities less food and beverages	160.637		151.251	-5.6	-5.8
Nondurables less food and beverages	222.312		200.642	-10.7	-9.7
Durables	105.609		105.180	1.6	-0.4
Services	249.389		250.966	3.9	0.6
SPECIAL AGGREGATE INDEXES
All items less shelter	208.499		204.423	-0.1	-2.0
All items less medical care	203.692		200.984	1.1	-1.3
Commodities less food	162.729		153.540	-5.5	-5.6
Nondurables	222.896		211.823	-4.2	-5.0
Nondurables less food	221.695		201.283	-10.1	-9.2
Services less rent of shelter (2)	267.620		269.631	3.8	0.8
Services less medical care services	230.556		232.096	4.2	0.7
Energy	211.786	199.374	189.281	-11.1	-10.6	-5.1
All items less energy	217.660		217.089	2.4	-0.3
All items less food and energy	216.796		216.102	2.3	-0.3
(1) This index series was calculated using a Laspeyres estimator. All other item stratum index series were calculated using a geometric means estimator. (2) Indexes on a December 1982=100 base. (3) Prior to January 2011 this series was titled Gas (piped) and electricity. (4) Special index based on a substantially smaller sample. (5) Indexes on a December 1993=100 base. (6) Indexes on a December 1997=100 base.
Note: Index applies to a month as a whole, not to any specific date.