The Consumer Price Index for All Urban Consumers (CPI-U) for the Kansas City, Mo.-Kan., metropolitan area increased 2.1 percent from the second half of 2011 to the second half of 2012, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Stanley W. Suchman noted that the increase was broad-based, with higher costs for shelter having the largest upward impact on the index. Food prices increased 2.4 percent, energy costs were little changed (0.1 percent), and the index for all items less food and energy rose 2.2 percent over the period.

Food

Food prices rose 2.4 percent from the second half of 2011 to the second half of 2012. Within the food index, costs for food away from home led the advance with an increase of 4.6 percent and prices for food at home were up 1.3 percent.

Energy

The energy index, which includes motor fuel and household fuels, was little changed (0.1 percent) from the second half of 2011 to the second half of 2012 following a sharp increase of 16.1 percent in the same period one year ago. A 1.7-percent rise in motor fuel costs, which was moderated by declining prices for motor fuel in the most recent six months of the period, was responsible for the slight increase in the energy component. Nearly offsetting the increase in prices for motor fuel, utility (piped) gas service costs declined 2.9 percent over the year. Electricity prices were unchanged as decreases in the first half of the period were offset by increases in the latter half.

All items less food and energy

The index for all items less food and energy rose 2.2 percent from the second half of 2011 to the second half of 2012. Over one-third of the increase was attributable to a 2.0-percent advance in shelter costs. Among other components of the index that contributed to the gain were medical care (5.6 percent), apparel (10.0 percent), and education and communication (1.7 percent).

The Kansas City CPI-U stood at 219.611 for the second half of 2012. This means that a market basket of goods and services that cost $100.00 in 1982-84 cost $219.61 in the second half of 2012. Because metropolitan area CPI data are not adjusted for seasonal price variation, consumers and businesses should be cautious in drawing conclusions about long-term retail price trends from short-term changes in the metropolitan area indexes.

CPI-W

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) for the Kansas City, Mo.-Kan., metropolitan area for the second half of 2012 was 211.963. The CPI-W increased 2.0 percent from the second half of 2011 to the second half of 2012.

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 areas; they only measure the average change in prices for each area since the base period.

The Kansas City, Mo.-Kan., Metropolitan Statistical Area includes Johnson, Leavenworth, Miami, and Wyandotte Counties in Kansas; and Cass, Clay, Clinton, Jackson, Lafayette, Platte, and Ray Counties in Missouri.

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