The Consumer Price Index for All Urban Consumers (CPI-U) in the Houston area rose 0.9 percent in March and April, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Stanley W. Suchman noted that the increase followed a 1.6-percent advance in January and February. The biggest factor in the current two-month movement was a 0.9-percent increase in the index for all items less food and energy, particularly higher shelter costs, but a 2.3-percent rise in energy costs also contributed. (Data in this report are not seasonally adjusted. Accordingly, short-term changes may reflect the impact of seasonal influences.)

From April 2012 to April 2013, the all items CPI-U rose 0.7 percent. (See chart 1.) Among the major components, annual price increases were recorded in the indexes for all items less food and energy (2.6 percent) and for food (1.2 percent), but energy costs fell over the year, down 12.3 percent.

Food

Food prices were little changed in March and April, slipping 0.1 percent, after increasing 0.7 percent during the first two months of the year. Among the two components of the index, prices for food at home (grocery stores) fell 0.4 percent and costs for food away from home edged up 0.1 percent during the latest period. Lower prices were noted for a number of items within the grocery group, but particularly among beef products including ground beef, beef roasts, and steaks. At the same time, higher prices were registered for fresh fish and seafood.

From April 2012 to April 2013, the food index advanced 1.2 percent, reflecting the combined effects of a 4.0-percent price rise for food away from home and a 0.8-percent price decline for food at home. The 0.8-percent price decline in grocery items was the fastest annual decrease since April 2010.

Energy

The energy index rose 2.3 percent in March and April, following a 5.8-percent increase in January and February. The biggest factor in the current increase was an 8.2-percent advance in electricity costs, though prices for utility (piped) gas service also rose, up 1.1 percent. Motor fuel prices were little changed during the two-month period, edging down 0.1 percent.

During the year ended in April 2013, the energy index fell 12.3 percent reflecting price declines for both electricity (-23.0 percent) and motor fuel (-9.3 percent). In sharp contrast, prices for natural gas climbed 25.7 percent over the year.

All items less food and energy

The index for all items less food and energy advanced 0.9 percent in March and April, after registering a 1.3-percent increase in January and February. The largest contributor to the increase in both periods was higher costs for shelter, particularly for owners’ equivalent rent of primary residence and lodging away from home. Owners’ costs moved up 1.8 percent during the latest two-month period compared to a 0.6-percent rise in the same period a year ago. Also contributing to the March-April increase were higher prices for apparel, particularly men’s clothing and women’s dresses, as well as increased costs for medical care and other goods and services.

Over the year, the index for all items less food and energy rose 2.6 percent, the fastest rate of increase since the year ended in February 2012 (2.7 percent). The leading factor in the current annual advance was higher shelter costs (4.7 percent), but increases in the indexes for medical care (5.7 percent), apparel (5.4 percent), and education and communication (2.1 percent) also contributed.

Next Release Date: The June 2013 Consumer Price Index for All Items for Houston-Galveston-Brazoria will be released on July 16, 2013.

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 88 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 29 percent of the total 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 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.

The index measures price changes from a designated reference date (1982-84) that equals 100.0. An increase of 16.5 percent, for example, is shown as 116.5. 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, see the CPI home page on the Internet at www.bls.gov/cpi and the BLS Handbook of Methods, Chapter 17, The Consumer Price Index, available on the Internet at www.bls.gov/opub/hom/homch17_a.htm.

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-Galveston-Brazoria, Texas, Consolidated Metropolitan Statistical Area (CMSA) includes Brazoria, Chambers, Fort Bend, Galveston, Harris, Liberty, Montgomery, and Waller Counties.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: 202-691-5200; Federal Relay Service: 1-800-877-8339.

Last Modified Date: May 16, 2013

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