Economic News Release

Consumer Price Index Summary

 Transmission of material in this release is embargoed until                                        
 8:30 a.m. (EDT) Tuesday, July 22, 2014  USDL-14-1345

 Technical information: (202) 691-7000  Reed.Steve@bls.gov  www.bls.gov/cpi
 Media Contact:         (202) 691-5902  PressOffice@bls.gov 

 CONSUMER PRICE INDEX – JUNE 2014

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 
 0.3 percent in June on a seasonally adjusted basis, the U.S. Bureau 
 of Labor Statistics reported today. Over the last 12 months, the all 
 items index increased 2.1 percent before seasonal adjustment.

 In contrast to the broad-based increase last month, the June 
 seasonally adjusted increase in the all items index was primarily 
 driven by the gasoline index. It rose 3.3 percent and accounted for 
 two-thirds of the all items increase. Other energy indexes were mixed, 
 with the electricity index rising, but the indexes for natural gas 
 and fuel oil declining. The food index decelerated in June, rising 
 only slightly, with the food at home index flat after recent increases.

 The index for all items less food and energy also decelerated in June, 
 increasing 0.1 percent after a 0.3 percent increase in May. The indexes 
 for shelter, apparel, medical care, and tobacco all increased in June, 
 and the index for household furnishings and operations rose for the 
 first time in a year. However, the index for new vehicles declined after 
 recent increases, and the index for used cars and trucks also fell.

 The all items index increased 2.1 percent over the last 12 months, the 
 same figure as for the 12 months ending May. The index for all items 
 less food and energy rose 1.9 percent over the last 12 months, a slight 
 decline from the 2.0 percent figure last month. The index for energy 
 increased 3.2 percent over the span, and the food index rose 2.3 percent.

 
 Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city
 average
                                                                               
                                                                               
                                  Seasonally adjusted changes from             
                                          preceding month                      
                                                                          Un-  
                                                                       adjusted
                                                                        12-mos.
                              Dec.  Jan.  Feb.  Mar.  Apr.  May   June   ended 
                              2013  2014  2014  2014  2014  2014  2014   June  
                                                                         2014  
                                                                               
                                                                               
 All items..................    .2    .1    .1    .2    .3    .4    .3      2.1
  Food......................    .0    .1    .4    .4    .4    .5    .1      2.3
   Food at home.............    .0    .1    .5    .5    .4    .7    .0      2.4
   Food away from home (1)..    .1    .1    .3    .3    .3    .2    .2      2.2
  Energy....................   1.6    .6   -.5   -.1    .3    .9   1.6      3.2
   Energy commodities.......   2.6   -.5  -1.3  -2.0   1.9    .6   3.0      2.3
    Gasoline (all types)....   2.6  -1.0  -1.7  -1.7   2.3    .7   3.3      2.0
    Fuel oil (1)............   2.4   3.7   4.1  -2.9  -3.0  -1.4  -1.7      4.0
   Energy services..........    .1   2.2    .7   2.6  -1.9   1.4   -.4      4.4
    Electricity.............    .4   1.8   -.2   1.1  -2.6   2.3    .2      4.2
    Utility (piped) gas                                                        
       service..............  -1.0   3.6   3.6   7.5    .3  -1.7  -2.6      5.1
  All items less food and                                                      
     energy.................    .1    .1    .1    .2    .2    .3    .1      1.9
   Commodities less food and                                                   
      energy commodities....    .0   -.1   -.1    .0    .1    .1    .1      -.2
    New vehicles............    .0   -.3    .1    .0    .3    .2   -.3       .0
    Used cars and trucks....    .0   -.5   -.1    .4    .5   -.1   -.4       .1
    Apparel.................    .4   -.3   -.3    .3    .0    .3    .5       .9
    Medical care commodities   -.6    .5    .6   -.3    .3    .5    .7      2.8
   Services less energy                                                        
      services..............    .1    .2    .2    .3    .3    .3    .1      2.7
    Shelter.................    .2    .3    .2    .3    .2    .3    .2      2.8
    Transportation services    -.4    .1    .3    .2    .7   1.0    .1      3.2
    Medical care services...    .2    .2    .2    .3    .3    .3    .0      2.6

   1 Not seasonally adjusted. 



 Consumer Price Index Data for June 2014

 Food

 The food index rose 0.1 percent in June; this compares to a 0.5 percent 
 increase in May and is its smallest monthly increase since January. The 
 index for food at home was unchanged in June after increasing 2.2 percent 
 over the first five months of the year. Major grocery store food groups were 
 mixed in June. The index for dairy and related products turned down in June, 
 falling 0.4 percent after rising in each of the previous seven months. The 
 fruits and vegetables index also turned down, falling 0.3 percent after a 
 1.1 percent increase in May. The index for cereals and bakery products fell 
 for the second month in a row, declining 0.2 percent. In contrast to these 
 declines, the index for meats, poultry, fish, and eggs increased in June, 
 though its 0.2 percent increase was its smallest since December. The index 
 for other food at home increased 0.1 percent in June, while the index for 
 nonalcoholic beverages was unchanged. The index for food at home has 
 increased 2.4 percent over the past year, with the index for meats, poultry, 
 fish, and eggs up 7.5 percent, but the indexes for nonalcoholic beverages 
 and for cereals and bakery products both declining. The index for food away 
 from home rose 0.2 percent in June and has risen 2.2 percent over the past 
 12 months.

 Energy

 The energy index increased 1.6 percent in June, its third increase in a row 
 and largest since December. The gasoline index rose for the third month in a 
 row, increasing 3.3 percent. (Before seasonal adjustment, gasoline prices 
 increased 0.3 percent.) The electricity index also increased in June, rising 
 0.2 percent. In contrast, the fuel oil index fell 1.7 percent, its fourth 
 consecutive decline. The index for natural gas also decreased, falling 2.6 
 percent. Over the past 12 months, the energy index has increased 3.2 percent, 
 with its major components increasing from a low of 2.0 percent (gasoline) to 
 a high of 5.1 percent (natural gas).  

 All items less food and energy

 The index for all items less food and energy increased 0.1 percent in June 
 after a 0.3 percent increase in May. The shelter index decelerated, increasing 
 0.2 percent in June after a 0.3 percent increase the prior month. The indexes 
 for rent and owners’ equivalent rent repeated their May increases of 0.3 percent 
 and 0.2 percent, respectively. However, the index for lodging away from home 
 turned down in June, falling 1.9 percent after rising 2.0 percent in May. The 
 apparel index rose 0.5 percent in June, its largest increase since last July. 
 The medical care index rose 0.1 percent in June; the index for medical care 
 services was unchanged, but the index for prescription drugs increased 1.0 
 percent. The index for household furnishings and operations rose 0.2 percent 
 in June, its first increase since June 2013. The index for airline fares, which 
 rose 5.8 percent in May, increased 0.4 percent in June. The tobacco index also 
 rose, increasing 1.0 percent, and the recreation index advanced 0.1 percent. 
 In contrast, the new vehicles index fell in June; its 0.3 percent decrease was 
 its first decline since January. The index for used cars and trucks also 
 decreased, declining 0.4 percent. 

 The index for all items less food and energy has risen 1.9 percent over the last 
 12 months; this is slightly lower than the 2.0 percent figure in May, but higher 
 than the 1.7 percent average annualized increase over the past five years. The 
 shelter index has increased 2.8 percent over the last 12 months, while the medical 
 care index has risen 2.6 percent. The index for new vehicles was unchanged over 
 the span.   


 Not seasonally adjusted CPI measures

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.1 percent 
 over the last 12 months to an index level of 238.343 (1982-84=100). For the month, 
 the index rose 0.2 percent prior to seasonal adjustment.  

 The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) 
 increased 2.0 percent over the last 12 months to an index level of 234.702 
 (1982-84=100). For the month, the index rose 0.2 percent prior to seasonal 
 adjustment.  

 The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 1.9 
 percent over the last 12 months. For the month, the index rose 0.2 percent on a 
 not seasonally adjusted basis. Please note that the indexes for the post-2012 
 period are subject to revision.


	
 The Consumer Price Index for July 2014 is scheduled to be released on Tuesday, 
 August 19, 2014, 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, and 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 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. 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 
 http://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 2013”.  
 These data are available on the CPI home page (http://www.bls.gov/cpi), or 
 by using the following link: http://www.bls.gov/cpi/cpivar2013.pdf   

 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

 CPI                                      202.416
 Less previous index                      201.800
 Equals index point change                   .616



 Percent Change

 Index point difference                      .616
 Divided by the previous index            201.800
 Equals                                     0.003
 Results multiplied by one hundred      0.003x100
 Equals percent change                        0.3





 A Note on Seasonally Adjusted and Unadjusted Data
   
 Because price data are used for different purposes by different groups, the 
 Bureau of Labor Statistics publishes seasonally adjusted as well as unadjusted 
 changes each month.

 For analyzing general 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.

 The unadjusted data are of primary interest to consumers concerned about the 
 prices they actually pay. Unadjusted data also are 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.

 Seasonal factors used in computing the seasonally adjusted indexes are derived 
 by the X-13ARIMA-SEATS Seasonal Adjustment Method.  Seasonally adjusted indexes 
 and seasonal factors are computed annually.  Each year, the last five years of 
 seasonally adjusted data are revised. Data from January 2009 through December 
 2013 were replaced in January 2014.  Exceptions to the usual revision schedule 
 were: the updated seasonal data at the end of 1977 replaced data from 1967 
 through 1977; and, in January 2002, dependently seasonally adjusted series were 
 revised for January 1987-December 2001 as a result of a change in the aggregation 
 weights for dependently adjusted series. For further information, please see 
 “Aggregation of Dependently Adjusted Seasonally Adjusted Series,” in the October 
 2001 issue of the CPI Detailed Report.

 Effective with the publication of data from January 2006 through December 2010 
 in January 2011, the Video and audio series and the Information technology, 
 hardware and services series were changed from independently adjusted to 
 dependently adjusted. This resulted in an increase in the number of seasonal 
 components used in deriving seasonal movement of the All items and 64 other lower 
 level aggregations, from 73 for the publication of January 1998 through December 
 2005 data to 82 for the publication of seasonally adjusted data for January 2006 
 and later.  Each year the seasonal status of every series is reevaluated based 
 upon certain statistical criteria. If any of the 82 components 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. Note: 35 of the 82 components are not seasonally 
 adjusted for 2014.

 Seasonally adjusted data, including the all items index levels, are subject to 
 revision for up to five years after their original release. For this reason, 
 BLS advises against the use of these data in escalation agreements.

 Effective with the calculation of the seasonal factors for 1990, the Bureau of 
 Labor Statistics has used an enhanced seasonal adjustment procedure called 
 Intervention Analysis Seasonal Adjustment for some CPI series. Intervention 
 Analysis Seasonal Adjustment allows for better estimates of seasonally 
 adjusted data.  Extreme values and/or sharp movements which might distort the 
 seasonal pattern are estimated and removed from the data prior to calculation of 
 seasonal factors. Beginning with the calculation of seasonal factors for 1996, 
 X-12-ARIMA software was used for Intervention Analysis Seasonal Adjustment. In 
 2014, for the 2009-2013 revisions, the Bureau of Labor Statistics began using 
 X-13ARIMA-SEATS to perform the seasonal adjustment of CPI series, including 
 Intervention Analysis Seasonal Adjustment for certain series.

 For the seasonal factors introduced in January 2014, BLS adjusted 31 series using 
 Intervention Analysis Seasonal Adjustment, including selected food and beverage 
 items, motor fuels, electricity and vehicles.  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.  

 For a complete list of Intervention Analysis Seasonal Adjustment series and 
 explanations, please refer to the article “Intervention Analysis Seasonal 
 Adjustment”, located on our website at http://www.bls.gov/cpi/cpisapage.htm.  

 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 Chris Graci at (202) 691-5826, or by e-mail at 
 graci.christopher@bls.gov, or contact Carlyle Jackson at (202) 691-6984, or by 
 e-mail at jackson.carlyle@bls.gov . If you have general questions about the CPI, 
 please call our information staff at (202) 691-7000.  

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Last Modified Date: July 22, 2014
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