Transmission of material in this release is embargoed until
8:30 a.m. (EDT) September 16, 2016 USDL-16-1828
Technical information: (202) 691-7000 Reed.Steve@bls.gov www.bls.gov/cpi
Media Contact: (202) 691-5902 PressOffice@bls.gov
CONSUMER PRICE INDEX – AUGUST 2016
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent
in August on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics
reported today. Over the last 12 months, the all items index rose 1.1 percent
before seasonal adjustment.
The seasonally adjusted increase in the all items index was caused by a rise
in the index for all items less food and energy. It increased 0.3 percent in
August, as the indexes for shelter and medical care advanced.
The energy and food indexes were both unchanged in August. Major energy
component indexes were mixed, with increases in the indexes for natural gas
and electricity offsetting declines in the gasoline and fuel oil indexes.
The food at home index declined for the fourth month in a row, offsetting an
increase in the index for food away from home.
The 0.3-percent increase in the index for all items less food and energy was
the largest rise since February 2016. Along with shelter and medical care,
the indexes for motor vehicle insurance, apparel, communication, and tobacco
all increased. In contrast, the indexes for used cars and trucks, household
furnishings and operations, recreation, and airline fares all declined
The all items index rose 1.1 percent for the 12 months ending August, a larger
increase than the 0.8-percent rise for the 12 months ending July. The index for
all items less food and energy rose 2.3 percent for the 12 months ending August.
The food index was unchanged over the last year, while the energy index
declined 9.2 percent.
Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city
Seasonally adjusted changes from
Feb. Mar. Apr. May June July Aug. ended
2016 2016 2016 2016 2016 2016 2016 Aug.
All items.................. -.2 .1 .4 .2 .2 .0 .2 1.1
Food...................... .2 -.2 .2 -.2 -.1 .0 .0 .0
Food at home............. .2 -.5 .1 -.5 -.3 -.2 -.2 -1.9
Food away from home (1).. .1 .2 .2 .2 .2 .2 .2 2.8
Energy.................... -6.0 .9 3.4 1.2 1.3 -1.6 .0 -9.2
Energy commodities....... -12.5 1.9 7.8 2.4 3.3 -4.4 -.9 -17.3
Gasoline (all types).... -13.0 2.2 8.1 2.3 3.3 -4.7 -.9 -17.8
Fuel oil (1)............ -2.9 1.7 1.9 6.2 3.3 -1.3 -2.5 -12.8
Energy services.......... .1 .2 -.1 .2 -.5 1.0 .8 -.4
Electricity............. -.2 .4 -.3 -.2 -.5 .5 .5 -.7
Utility (piped) gas
service.............. 1.0 -.7 .6 1.7 -.4 3.1 2.1 1.1
All items less food and
energy................. .3 .1 .2 .2 .2 .1 .3 2.3
Commodities less food and
energy commodities.... .3 -.2 -.1 -.2 -.2 -.1 .1 -.5
New vehicles............ .2 .0 -.3 -.1 -.2 .2 .0 .0
Used cars and trucks.... .2 -.1 -.3 -1.3 -1.1 -1.0 -.6 -4.0
Apparel................. 1.6 -1.1 -.3 .8 -.4 .0 .2 .3
Medical care commodities .6 .3 .5 -.2 1.1 .4 1.1 4.5
Services less energy
services.............. .3 .2 .3 .3 .3 .2 .3 3.2
Shelter................. .3 .2 .3 .4 .3 .2 .3 3.4
Transportation services .2 .2 .7 .3 .3 -.2 .1 3.1
Medical care services... .5 .1 .3 .5 .2 .5 .9 5.1
1 Not seasonally adjusted.
The food index was unchanged in August, as it was in July. The index for food at
home continued to decline, falling 0.2 percent as none of the six major grocery
store food group indexes increased. The index for meats, poultry, fish, and eggs
fell 0.4 percent in August, its twelfth decline in a row. The index for other
food at home fell 0.2 percent, the same decline as last month, and the index for
nonalcoholic beverages decreased 0.1 percent. The remaining major grocery store
food group indexes were all unchanged in August.
The food index was unchanged over the past 12 months; this was the first time it
did not rise over a 12 month period since the 12 months ending February 2010.
The food at home index fell 1.9 percent over the past 12 months. The fruits and
vegetables index rose 0.3 percent over the span, while the five other major
grocery store food group indexes declined. The index for meats, poultry, fish,
and eggs posted the largest decline, falling 6.5 percent. The index for food
away from home continued to rise in August, increasing 0.2 percent. It has
increased 2.8 percent over the past 12 months.
The energy index, which declined in July after four consecutive increases, was
unchanged in August. The gasoline index, which fell 4.7 percent in July,
declined 0.9 percent in August. (Before seasonal adjustment, gasoline prices
decreased 3.0 percent in August.) The fuel oil index also declined in August,
falling 2.5 percent. In contrast to these declines, the index for natural gas
continued to increase in August, rising 2.1 percent after a 3.1-percent increase
in July. The electricity index advanced 0.5 percent in August, the same increase
as in July.
The energy index has declined 9.2 percent over the past year. The gasoline index
has declined 17.8 percent over that span, and the index for fuel oil has
decreased 12.8 percent. Despite recent increases, the electricity index has also
declined over the past 12 months, falling 0.7 percent. The index for natural gas
is the only major energy component index to rise over the past year, increasing
All items less food and energy
The index for all items less food and energy increased 0.3 percent in August,
following a 0.1-percent increase in July. The shelter index continued to rise,
increasing 0.3 percent after a 0.2-percent advance the prior month. The indexes
for rent and owners' equivalent rent both rose 0.3 percent in August, as they
did in July. The index for lodging away from home turned up in August, increasing
2.0 percent after a 2.4-percent decline the prior month. The medical care index
rose sharply in August, increasing 1.0 percent. The hospital services index rose
1.7 percent, and the index for prescription drugs advanced 1.3 percent. The index
for motor vehicle insurance continued to rise in August, increasing 0.5 percent.
The apparel index increased 0.2 percent, and the index for tobacco rose
0.7 percent after falling in July.
In contrast to these increases, the index for used cars and trucks continued to
decline, falling 0.6 percent in August, its sixth consecutive decrease. The
indexes for household furnishings and operations, for recreation, and for airline
fares all fell slightly in August, each decreasing 0.1 percent. The indexes for
new vehicles and for alcoholic beverages were unchanged in August.
The index for all items less food and energy increased 2.3 percent over the past
12 months. Indexes increasing more rapidly include motor vehicle insurance
(6.5 percent), medical care (4.9 percent), and shelter (3.4 percent). Among the
indexes rising more slowly are alcoholic beverages (1.1 percent), recreation
(0.9 percent), and apparel (0.3 percent). Indexes declining over the past
12 months include used cars and trucks (-4.0 percent), airline fares
(-3.5 percent), and household furnishings and operations (-0.9 percent).
Not seasonally adjusted CPI measures
The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.1 percent over
the last 12 months to an index level of 240.853 (1982-84=100). For the month, the
index increased 0.1 percent prior to seasonal adjustment.
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
increased 0.7 percent over the last 12 months to an index level of 234.909
(1982-84=100). For the month, the index increased 0.1 percent prior to seasonal
The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.8
percent over the last 12 months. For the month, the index was unchanged on a not
seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months
are subject to revision.
The Consumer Price Index for September 2016 is scheduled to be released on Tuesday,
October 18, 2016, at 8:30 a.m. (EDT).
Facilities for Sensory Impaired
Information from this release will be made available to sensory impaired individuals
upon request. Voice phone: 202-691-5200, Federal Relay Services: 1-800-877-8339.
Brief Explanation of the CPI
The Consumer Price Index (CPI) is a measure of the average change in prices over
time of goods and services purchased by households. The Bureau of Labor Statistics
publishes CPIs for two population groups: (1) the CPI for Urban Wage Earners and
Clerical Workers (CPI-W), which covers households of wage earners and clerical workers
that comprise approximately 28 percent of the total population and (2) the CPI for All
Urban Consumers (CPI-U) and the Chained CPI for All Urban Consumers (C-CPI-U), which
covers approximately 89 percent of the total population and includes, in addition to
wage earners and clerical worker households, 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 CPIs are based on prices of food, clothing, shelter, fuels, transportation fares,
charges for doctors’ and dentists’ services, drugs, and other goods and services that
people buy for day-to-day living. Prices are collected each month 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. Prices of fuels and a few other
items are obtained every month in all 87 locations. Prices of most other commodities
and services are collected every month in the three largest geographic areas and every
other month in other areas. Prices of most goods and services are obtained by personal
visits or telephone calls of the Bureau’s trained representatives.
In calculating the index, price changes for the various items in each location are
averaged together with weights, which represent their importance in the spending of the
appropriate population group. Local data are then combined to obtain a U.S. city average.
For the CPI-U and CPI-W separate indexes are also published by size of city, by region of
the country, for cross-classifications of regions and population-size classes, and for 27
local areas. Area indexes do not measure differences in the level of prices among cities;
they only measure the average change in prices for each area since the base period. For
the C-CPI-U data are issued only at the national level. It is important to note that the
CPI-U and CPI-W are considered final when released, but the C-CPI-U is issued in
preliminary form and subject to two annual revisions.
The index measures price change from a designed reference date. For the CPI-U and the
CPI-W the reference base is 1982-84 equals 100. The reference base for the C-CPI-U is
December 1999 equals 100. An increase of 16.5 percent from the reference base, for
example, is shown as 116.500. 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 visit the CPI home page on the Internet at www.bls.gov/cpi/ or
contact our CPI Information and Analysis Section on (202) 691-7000.
Note on Sampling Error in the Consumer Price Index
The CPI is a statistical estimate that is subject to sampling error because it is based
upon a sample of retail prices and not the complete universe of all prices. BLS
calculates and publishes estimates of the 1-month, 2-month, 6-month and 12-month percent
change standard errors annually, for the CPI-U. These standard error estimates can be
used to construct confidence intervals for hypothesis testing. For example, the estimated
standard error of the 1 month percent change is 0.04 percent for the U.S. All Items
Consumer Price Index. This means that if we repeatedly sample from the universe of all
retail prices using the same methodology, and estimate a percentage change for each sample,
then 95% of these estimates would be within 0.08 percent of the 1 month percentage change
based on all retail prices. For example, for a 1-month change of 0.2 percent in the All
Items CPI for All Urban Consumers, we are 95 percent confident that the actual percent
change based on all retail prices would fall between 0.12 and 0.28 percent. For the latest
data, including information on how to use the estimates of standard error, see "Variance
Estimates for Price Changes in the Consumer Price Index, January-December 2014." These
data are available on the CPI home page (www.bls.gov/cpi), or by using the following
Calculating Index Changes
Movements of the indexes from one month to another are usually expressed as percent changes
rather than changes in index points, because index point changes are affected by the level
of the index in relation to its base period while percent changes are not. The example
below illustrates the computation of index point and percent changes.
Percent changes for 3-month and 6-month periods are expressed as annual rates and are
computed according to the standard formula for compound growth rates. These data indicate
what the percent change would be if the current rate were maintained for a 12-month period.
Index Point Change
Less previous index 201.800
Equals index point change .616
Index point difference .616
Divided by the previous index 201.800
Results multiplied by one hundred 0.003x100
Equals percent change 0.3
A Note on the Use of Seasonally Adjusted and Unadjusted Data
The Consumer Price Index (CPI) produces both unadjusted and seasonally adjusted data.
Seasonally adjusted data are computed using seasonal factors derived by the X-13ARIMA-SEATS
Seasonal Adjustment Method. These factors are updated each February, and the new factors are
used to revise the previous five years of seasonally adjusted data. For more information on
data revisions and exceptions to the usual revision schedule, please see the Fact Sheet on
Seasonal Adjustment (http://www.bls.gov/cpi/cpisaqanda.htm) and the Timeline of Seasonal
Adjustment Methodological Changes (http://www.bls.gov/cpi/cpiseastimeline.htm).
How to Use Seasonally Adjusted and Unadjusted Data
For analyzing short-term price trends in the economy, seasonally adjusted changes are usually
preferred since they eliminate the effect of changes that normally occur at the same time and
in about the same magnitude every year—such as price movements resulting from changing
climatic conditions, production cycles, model changeovers, holidays, and sales. This allows
data users to focus on changes that are not typical for the time of year.The unadjusted data
are of primary interest to consumers concerned about the prices they actually pay. Unadjusted
data are also used extensively for escalation purposes. Many collective bargaining contract
agreements and pension plans, for example, tie compensation changes to the Consumer Price Index
before adjustment for seasonal variation. BLS advises against the use of seasonally adjusted
data in escalation agreements because seasonally adjusted series are revised annually.
The Bureau of Labor Statistics uses Intervention Analysis Seasonal Adjustment for some CPI
series. Sometimes extreme values or sharp movements can distort the underlying seasonal pattern
of price change. Intervention Analysis Seasonal Adjustment is a process by which the distortions
caused by such unusual events are estimated and removed from the data prior to calculation of
seasonal factors. The resulting seasonal factors, which more accurately represent the seasonal
pattern, are then applied to the unadjusted data.
2016 Series Adjusted Using Intervention Analysis Seasonal Adjustment
For the seasonal factors introduced in January 2016, BLS adjusted 37 series using Intervention
Analysis Seasonal Adjustment, including selected food and beverage items, motor fuels and natural
gas. For example, this procedure was used for the Motor fuel series to offset the effects of
events such as the response in crude oil markets to the worldwide economic downturn in 2008.
Revision of Seasonally Adjusted Indexes
Seasonally adjusted data, including the U.S. city average All items index levels, are subject to
revision for up to five years after their original release. Every year, economists in the CPI
calculate new seasonal factors for seasonally adjusted series and apply them to the last five years
of data. Seasonally adjusted indexes beyond the last five years of data are considered to be final
and not subject to revision. In January 2016, revised seasonal factors and seasonally adjusted
indexes for 2011-2015 were calculated and published. For directly adjusted series, the seasonal
factors for 2015 will be applied to data in 2016 to produce the seasonally adjusted 2016 indexes.
Determining Seasonal Status
Each year the seasonal status of every series is reevaluated based upon certain statistical criteria.
Using these criteria, BLS economists determine whether a series should change its status: from "not
seasonally adjusted" to "seasonally adjusted", or vice versa. If any of the 81 components of the U.S.
city average all items index change their seasonal adjustment status from seasonally adjusted to not
seasonally adjusted, not seasonally adjusted data will be used in the aggregation of the dependent
series for the last five years, but the seasonally adjusted indexes before that period will not be
changed. 28 of the 81 components of the U.S. city average all items index are not seasonally adjusted
For additional information on seasonal adjustment in the CPI, please write to the Bureau of Labor
Statistics, Division of Consumer Prices and Price Indexes, Washington, DC 20212 or contact Justin
Yarros, Samuel An or Marie Rogers at (202) 691-6968 or by e-mail at Yarros.Justin@bls.gov,
An.Samuel@bls.gov or Rogers.Marie@bls.gov. If you have general questions about the CPI, please call
our information staff at (202) 691-7000.