Economic News Release

Consumer Price Index Summary

Transmission of material in this release is embargoed until                                        
8:30 a.m. (EDT) Wednesday, September 17, 2014  USDL-14-1711

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 2014

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 
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 increased 1.7 percent before seasonal adjustment.

The seasonally adjusted decline in the all items index was the first 
since April 2013. The indexes for food and shelter rose, but the 
increases were more than offset by declines in energy indexes, 
especially gasoline. The energy index fell 2.6 percent, with the 
gasoline index declining 4.1 percent and the indexes for natural gas 
and fuel oil also decreasing. 

The index for all items less food and energy was unchanged in August; 
this was the first month since October 2010 that the index did not 
increase. While the shelter index increased and the indexes for new 
vehicles and for alcoholic beverages also rose, these advances were 
offset by declines in several indexes, including airline fares, 
recreation, household furnishings and operations, apparel, and used 
cars and trucks.

The all items index increased 1.7 percent over the last 12 months, a 
decline from the 2.0 percent figure for the 12 months ending July, and 
the smallest 12-month change since March. The index for all items less 
food and energy also rose 1.7 percent over the last 12 months. The food 
index has risen 2.7 percent over the span, while the energy index has 
increased 0.4 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.
                              Feb.  Mar.  Apr.  May   June  July  Aug.   ended 
                              2014  2014  2014  2014  2014  2014  2014   Aug.  
                                                                         2014  
                                                                               
                                                                               
 All items..................    .1    .2    .3    .4    .3    .1   -.2      1.7
  Food......................    .4    .4    .4    .5    .1    .4    .2      2.7
   Food at home.............    .5    .5    .4    .7    .0    .4    .2      2.9
   Food away from home (1)..    .3    .3    .3    .2    .2    .3    .2      2.5
  Energy....................   -.5   -.1    .3    .9   1.6   -.3  -2.6       .4
   Energy commodities.......  -1.3  -2.0   1.9    .6   3.0   -.3  -3.9     -2.4
    Gasoline (all types)....  -1.7  -1.7   2.3    .7   3.3   -.3  -4.1     -2.8
    Fuel oil (1)............   4.1  -2.9  -3.0  -1.4  -1.7   -.7  -1.2      -.2
   Energy services..........    .7   2.6  -1.9   1.4   -.4   -.4   -.6      4.6
    Electricity.............   -.2   1.1  -2.6   2.3    .2   -.3    .1      4.1
    Utility (piped) gas                                                        
       service..............   3.6   7.5    .3  -1.7  -2.6   -.4  -2.8      5.8
  All items less food and                                                      
     energy.................    .1    .2    .2    .3    .1    .1    .0      1.7
   Commodities less food and                                                   
      energy commodities....   -.1    .0    .1    .1    .1    .0   -.1      -.4
    New vehicles............    .1    .0    .3    .2   -.3    .3    .2       .4
    Used cars and trucks....   -.1    .4    .5   -.1   -.4   -.3   -.3       .0
    Apparel.................   -.3    .3    .0    .3    .5    .2   -.2       .0
    Medical care commodities    .6   -.3    .3    .5    .7    .3   -.1      2.6
   Services less energy                                                        
      services..............    .2    .3    .3    .3    .1    .1    .0      2.5
    Shelter.................    .2    .3    .2    .3    .2    .3    .2      2.9
    Transportation services     .3    .2    .7   1.0    .1   -.7   -.6      1.5
    Medical care services...    .2    .3    .3    .3    .0    .1    .0      1.9

   1 Not seasonally adjusted.

   





 



Consumer Price Index Data for August 2014

Food

The food index rose 0.2 percent in August after increasing 0.4 percent in 
July. The food at home index was also up 0.2 percent, with the six major 
grocery store food group indexes split between three increases and three 
declines. The index for meats, poultry, fish, and eggs rose 1.5 percent 
in August, the largest increase among the groups. The index for beef and 
veal rose 4.2 percent, its largest increase since November 2003. The index 
for dairy and related products rose 0.6 percent, and the cereals and bakery 
products index advanced 0.2 percent. In contrast, the index for fruits and 
vegetables fell 0.8 percent in August, with the indexes for fresh fruits 
and fresh vegetables both declining. The index for nonalcoholic beverages 
also declined in August; its 0.2 percent decrease was its first decline 
since April. The index for other food at home, which rose 0.7 percent in 
July, decreased 0.2 percent in August. Over the last 12 months, the food 
at home index has risen 2.9 percent, with the index for meats, poultry, 
fish and eggs up 8.8 percent. Nonalcoholic beverages was the only major 
grocery store food group index to decline over the span, falling 0.2 
percent. The index for food away from home advanced 0.2 percent in August 
and has increased 2.5 percent over the past 12 months.

Energy

The energy index, which declined 0.3 percent in July, fell 2.6 percent in 
August, its largest decline since March 2013. The gasoline index fell 4.1 
percent in August following a 0.3 percent decline in July. (Gasoline prices 
also decreased 4.1 percent before seasonal adjustment.) The index for natural 
gas also fell in August; its 2.8 percent decline was the fourth decrease in a 
row. The fuel oil index declined for the sixth consecutive month, falling 1.2 
percent. The electricity index was the only major energy component index to 
increase in August, advancing 0.1 percent. Over the last 12 months, the index 
for natural gas has risen 5.8 percent despite the recent declines, and the 
electricity index has increased 4.1 percent. However, the gasoline index has 
decreased 2.8 percent and the fuel oil index has declined 0.2 percent.

All items less food and energy

The index for all items less food and energy was unchanged in August after 
rising 0.1 percent in both June and July. The shelter index advanced 0.2 
percent in August after a 0.3 percent increase in July. The indexes for rent 
and owners’ equivalent rent both increased 0.2 percent, while the lodging 
away from home index rose 0.8 percent. The index for alcoholic beverages rose 
0.8 percent in August, its largest increase since January 2007. The new 
vehicles index, which increased 0.3 percent in July, rose 0.2 percent in 
August, and the personal care index advanced 0.1 percent. In contrast to 
these increases, the index for airline fares fell sharply for the second 
month in a row, declining 4.7 percent. The recreation index fell 0.4 percent 
in August, its largest decline since December 2009. The index for household 
furnishings and operations fell 0.3 percent, and the apparel index declined 
0.2 percent. The medical care index was unchanged in August, the first time 
since December 2013 it did not increase. The index for medical care services 
was unchanged, as was the index for prescription drugs. The tobacco index was 
also unchanged in August.

The index for all items less food and energy has risen 1.7 percent over the 
last 12 months. The shelter index has risen 2.9 percent over this span, and 
the medical care index has increased 2.1 percent. The index for new vehicles 
has risen 0.4 percent, while the indexes for apparel and for used cars and 
trucks are both unchanged over the span. The index for airline fares has 
declined 2.7 percent.


Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.7 percent 
over the last 12 months to an index level of 237.852 (1982-84=100). For the 
month, the index fell 0.2 percent prior to seasonal adjustment.  

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) 
increased 1.6 percent over the last 12 months to an index level of 234.030 
(1982-84=100). For the month, the index fell 0.2 percent prior to seasonal 
adjustment.  

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 
1.5 percent over the last 12 months. For the month, the index fell 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 September 2014 is scheduled to be released on Wednesday, 
October 22, 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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