Prices in the Los Angeles area, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), decreased 0.5 percent in December, the U.S. Bureau of Labor Statistics reported today. (See table A.) Regional Commissioner Richard J. Holden noted that the December decrease was influenced by lower prices for gasoline and apparel. (Data in this report are not seasonally adjusted. Accordingly, month-to-month changes may reflect seasonal influences.)

Over the last 12 months, the CPI-U increased 2.2 percent. (See chart 1.) Energy prices rose 6.4 percent, largely the result of an increase in the price of gasoline. The index for all items less food and energy advanced 1.3 percent since December 2010.

Chart 1. Over-the-year percent change in CPI-U, Los Angeles-Riverside-Orange County, December 2008 – December 2011

Food

Food prices inched down 0.1 percent for the month of December. (See table 1.) Prices for food at home declined 0.3 percent, but prices for food away from home increased 0.2 percent for the same period.

Over the year, food prices rose 4.4 percent. Prices for food at home advanced 5.8 percent since a year ago, and prices for food away from home increased 2.5 percent.

Energy

The energy index decreased 3.9 percent over the month. The decrease was mainly due to lower prices for gasoline (-5.7 percent). Prices for electricity were virtually unchanged, while prices for natural gas service decreased 0.8 percent in December.

Energy prices rose 6.4 percent over the year, largely due to higher prices for gasoline (10.1 percent). Prices paid for electricity were virtually unchanged, while prices for natural gas service declined 3.3 percent during the past year.

All items less food and energy

The index for all items less food and energy inched down 0.2 percent in December. Lower prices for apparel (-4.6 percent) and other goods and services (-1.2 percent) were partially offset by higher prices for household furnishings and operations (0.4 percent) and shelter (0.2 percent).

Over the year, the index for all items less food and energy advanced 1.3 percent. Components contributing to the increase included medical care (4.0 percent), apparel (3.0 percent), and shelter (1.0 percent). Partly offsetting the increases was a price decline in other goods and services(-1.0 percent).

CPI-W

In December, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was 224.444, down 0.6 percent from November. The CPI-W increased 2.2 percent over the year.

The January 2012 Consumer Price Index for the Los Angeles-Riverside-Orange County is scheduled to be released on February 17, 2012, at 10:00 a.m. (PST).

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 87 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 32 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 25,000 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 Los Angeles-Riverside-Orange County, CA. metropolitan area covered in this release is comprised of Los Angeles, Orange, Riverside, San Bernardino, and Ventura Counties in the State of California.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: 202-691-5200; TDD message referral phone number: 1-800-877-8339.

For personal assistance or further information on Consumer Price Indexes, as well as other Bureau products, contact the San Francisco Information Office at (415) 625-2270 from 9:00 a.m. to 11:30 a.m. and 1:30 p.m. to 4:00 p.m. PT.

Please click here for a text formatted copy of the table issued with this release.

Last Modified Date: January 19, 2012