Prices in the Houston-The Woodlands-Sugar Land area, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), rose 0.9 percent for the two months ending in February 2021, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Michael Hirniak noted that a 7.7-percent advance in the energy index was the largest factor in the rise, but a 0.4-percent increase in the all items less food and energy index was another big contributor. (Data in this report are not seasonally adjusted. Accordingly, bi-monthly changes may reflect seasonal influences.)

Over the last 12 months, the CPI-U rose 1.0 percent. Higher energy and food prices were responsible for the latest increase, rising 8.6 percent and 3.5 percent, respectively. The index for all items less food and energy was unchanged. (See chart 1 and table 1.) 

  

Food

Food prices increased 0.6 percent for the two months ending in February. Within the two components of the index, prices for food at home were responsible for almost all of the increase, rising 1.1 percent, while prices for food away from home crept up 0.1 percent for the same period.

During the 12 months ending in February 2021, the index for food rose 3.5 percent, the largest increase since an equal rise in February 2015. Prices for food away from home advanced 4.6 percent, the largest 12-month increase since April 2009. Prices for food at home (grocery store prices) increased 2.4 percent over the year.

Energy

The energy index rose 7.7 percent for the two months ending in February, after rising 4.2 percent in the two months ending in December. The latest increase was mainly due to higher prices for gasoline (18.4 percent), but prices for natural gas service also rose (4.4 percent). Prices for electricity declined 1.0 percent during the two-month period.

From February 2020 to February 2021, the energy index increased 8.6 percent over the year, largely due to higher prices for electricity (19.7 percent). Prices paid for natural gas service also increased (6.5 percent), while prices for gasoline edged up (0.2 percent) during the past year.

All items less food and energy

The index for all items less food and energy rose 0.4 percent in January and February, after declining 0.2 percent in November and December. The latest movement was fueled by higher prices for new vehicles (3.9 percent), recreation (1.5 percent), and apparel (2.2 percent). These increases were partially offset by lower prices for motor vehicle insurance (-8.1 percent) and household furnishings and operations (-1.4 percent).

Over the year, the index for all items less food and energy was unchanged. Increases to the index included higher prices for new and used motor vehicles (4.8 percent), owners’ equivalent rent of residences (1.4 percent), and medical care (2.4 percent). Falling prices for apparel (-12.7 percent), motor vehicle insurance (-20.1 percent), and household furnishings and operations (-0.6 percent) helped balance out these increases.

The April 2021 Consumer Price Index for the Houston-The Woodlands-Sugar Land area is scheduled to be released on May 12, 2021.

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 93 percent of the total U.S. population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers approximately 29 percent of the total U.S. 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 75 urban areas across the country from about 6,000 housing units and approximately 22,000 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; for most of the CPI-U the reference base is 1982-84 equals 100. An increase of 7 percent from the reference base, for example, is shown as 107.000.  Alternatively, that relationship can also be expressed as the price of a base period market basket of goods and services rising from $100 to $107. For further details see the CPI home page on the internet at www.bls.gov/cpi and the CPI section of the BLS Handbook of Methods 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-The Woodlands-Sugar Land, Texas, Core Based Statistical Area includes the counties of Austin, Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller.

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