Economic News Release

Consumer Price Index Summary

 Transmission of material in this release is embargoed until                                        
 8:30 a.m. (EDT) Thursday, June 18, 2015        USDL-15-1164

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

 CONSUMER PRICE INDEX - MAY 2015

 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent
 in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics
 reported today. Over the last 12 months, the all items index was unchanged
 before seasonal adjustment.

 The gasoline index increased sharply in May, rising 10.4 percent and accounting
 for most of the seasonally adjusted all items increase. Other energy indexes
 were mixed, with the fuel oil index rising but the electricity index declining
 and the index for natural gas unchanged. The food index was unchanged for the
 second month in a row, as a decline in the food at home index offset an
 increase in the index for food away from home. 

 The index for all items less food and energy rose 0.1 percent in May, its
 smallest increase since December. The indexes for shelter, airline fares, and
 medical care all increased, as did the indexes for personal care, recreation,
 new vehicles, alcoholic beverages, and tobacco. In contrast, the indexes for
 apparel, for household furnishings and operations, and for used cars and
 trucks all declined in May.   

 The all items index was unchanged for the 12 months ending May after showing a
 0.2-percent decline for the 12 months ending April. The energy index fell 16.3
 percent over the last 12 months, with the gasoline index down 25.0 percent
 despite rising in May. The food index increased 1.6 percent over the last year,
 and the index for all items less food and energy rose 1.7 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
                              Nov.  Dec.  Jan.  Feb.  Mar.  Apr.  May   12-mos.
                              2014  2014  2015  2015  2015  2015  2015   ended 
                                                                       May 2015
                                                                               
                                                                               
 All items..................   -.3   -.3   -.7    .2    .2    .1    .4       .0
  Food......................    .2    .2    .0    .2   -.2    .0    .0      1.6
   Food at home.............    .1    .2   -.2    .1   -.5   -.2   -.2       .6
   Food away from home (1)..    .4    .3    .2    .3    .2    .2    .2      3.0
  Energy....................  -4.1  -4.7  -9.7   1.0   1.1  -1.3   4.3    -16.3
   Energy commodities.......  -7.0  -9.0 -18.0   2.1   3.8  -1.9   9.6    -24.8
    Gasoline (all types)....  -7.2  -9.2 -18.7   2.4   3.9  -1.7  10.4    -25.0
    Fuel oil (1)............  -3.5  -7.8  -9.9   1.9   5.9  -8.4    .7    -27.6
   Energy services..........   -.3    .8   -.1   -.2  -1.5   -.5  -1.0     -3.3
    Electricity.............    .0    .6    .9    .3  -1.1    .0  -1.2       .5
    Utility (piped) gas                                                        
       service..............  -1.3   1.4  -3.4  -2.0  -2.7  -2.6    .0    -15.4
  All items less food and                                                      
     energy.................    .1    .1    .2    .2    .2    .3    .1      1.7
   Commodities less food and                                                   
      energy commodities....   -.3   -.2   -.1    .2    .3    .1   -.1      -.3
    New vehicles............    .0    .0   -.1    .2    .2    .1    .2       .8
    Used cars and trucks....   -.9   -.8   -.1   1.0   1.2    .6   -.4      -.5
    Apparel.................   -.7   -.8    .3    .3    .5   -.3   -.5     -1.5
    Medical care commodities    .6    .9   -.3    .7    .1    .1    .4      3.9
   Services less energy                                                        
      services..............    .2    .2    .3    .1    .2    .3    .2      2.4
    Shelter.................    .2    .2    .3    .2    .3    .3    .2      2.9
    Transportation services     .2    .0    .4    .3    .0    .1    .7      1.5
    Medical care services...    .3    .3    .1   -.2    .4    .9    .2      2.5

   1 Not seasonally adjusted.




 Consumer Price Index Data for May 2015

 Food

 The food index was unchanged in May. As was the case in April, the index for
 food away from home rose but the food at home index declined. Four of the six
 major grocery store food group indexes declined in May, led by the dairy and
 related products index, which fell 0.7 percent. The index for meats, poultry,
 fish, and eggs declined 0.5 percent, with the index for beef and veal falling
 0.1 percent, its first decline since January 2014. The index for nonalcoholic
 beverages fell 0.2 percent as the coffee index declined, and the index for
 cereals and bakery products fell 0.1 percent. In contrast to these declines,
 the index for fruits and vegetables increased 0.3 percent as the fresh
 vegetables index rose 1.2 percent, more than offsetting a decline in the fresh
 fruits index. The index for other food at home also rose in May, increasing 0.1
 percent. The food at home index rose 0.6 percent for the 12 months ending May.
 Four of the six major grocery store food groups increased over this span, led
 by meats, poultry, fish, and eggs, which increased 2.1 percent. The indexes for
 dairy and related products and for fruits and vegetables declined over the last
 year. The index for food away from home rose 0.2 percent in May and has risen
 3.0 percent over the past 12 months.   
 
 Energy

 The energy index rose 4.3 percent in May after declining in April. The gasoline
 index, which fell in April, rose 10.4 percent in May. (Before seasonal
 adjustment, gasoline prices rose 10.5 percent in May.) The index for fuel oil
 also increased in May, though the increase was only 0.7 percent. The index for
 natural gas, which had declined 4 months in a row, was unchanged in May. The
 electricity index declined in May, falling 1.2 percent after being unchanged
 in April. The electricity index has increased 0.5 percent over the last 12
 months, its smallest 12-month increase since January 2013. The other energy
 components have sharply declined over the last 12 months: fuel oil has fallen
 27.6 percent, gasoline has declined 25.0 percent, and natural gas has decreased
 15.4 percent. 

 All items less food and energy

 The index for all items less food and energy increased 0.1 percent in May
 following a 0.3 percent increase in April. The shelter index, which rose 0.3
 percent in April, increased 0.2 percent in May. The indexes for rent and owners'
 equivalent rent both rose 0.3 percent, but the index for lodging away from home
 turned down in May, falling 2.0 percent. The index for airline fares, which had
 declined 5 of the last 6 months, rose sharply in May, increasing 5.7 percent.
 The medical care index rose 0.2 percent in May after increasing 0.7 percent in
 April. The hospital services index rose 0.5 percent and the index for
 prescription drugs advanced 0.4 percent. The personal care index rose 0.3
 percent in May, while the recreation index increased 0.1 percent. Also
 increasing in May were the indexes for new vehicles (0.2 percent), tobacco
 (0.4 percent), and alcoholic beverages (0.2 percent). In contrast to these
 increases, the apparel index declined 0.5 percent in May. The index for
 household furnishings and operations fell 0.3 percent, and the index for used
 cars and trucks decreased 0.4 percent. 

 The index for all items less food and energy has risen 1.7 percent over the past
 12 months, a slight decline from the 1.8-percent increase for the 12 months
 ending April. The shelter index has risen 2.9 percent over the last year, the
 medical care index has increased 2.8 percent, and the new vehicles index has
 advanced 0.8 percent. The indexes for airline fares, apparel, and used cars and
 trucks have all declined over the past 12 months.
 
 Not seasonally adjusted CPI measures

 The Consumer Price Index for All Urban Consumers (CPI-U) was virtually unchanged
 over the last 12 months, with a May 2015 index level of 237.805 (1982-84=100).
 For the month, the index rose 0.5 percent prior to seasonal adjustment.  

 The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W)
 decreased 0.6 percent over the last 12 months to an index level of 232.908
 (1982-84=100). For the month, the index rose 0.6 percent prior to seasonal
 adjustment.  

 The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) declined
 0.3 percent over the last 12 months. For the month, the index rose 0.6 percent
 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 June 2015 is scheduled to be released on Friday,
 July 17, 2015, 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 2013."  These data are available on the CPI home page
 (www.bls.gov/cpi), or by using the following link:
 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 the Use of Seasonally Adjusted and Unadjusted Data

 Introduction

 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
 January, 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
 (www.bls.gov/cpi/cpisaqanda.htm) and the Timeline of Seasonal Adjustment
 Methodological Changes (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.

 Intervention Analysis
 
 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.
 
 2015 Series Adjusted Using Intervention Analysis Seasonal Adjustment

 For the seasonal factors introduced in January 2015, BLS adjusted 33 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.

 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 2015, revised seasonal
 factors and seasonally adjusted indexes for 2009-2014 were calculated and
 published. For directly adjusted series, the seasonal factors for 2014 will
 be applied to data for 2015 to produce the seasonally adjusted 2015 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 82 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. Thirty-two of the 82
 components of the U.S. city average all items index are not seasonally adjusted
 for 2015.

 Contact Information
 
 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 Christopher Graci, Justin Yarros, or Samuel An
 at (202) 691-6968 or by e-mail at Graci.Christopher@bls.gov, Yarros.Justin@bls.gov
 or An.Samuel@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: June 18, 2015
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