Consumer Prices Increase 0.5% in February As Energy and Food Prices Rise

2011-03-17
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U.S. Bureau of Labor Statistics On a seasonally adjusted basis, the CPI-U increased 0.5 percent in February after rising 0.4 percent in January. The index for all items less food and energy rose 0.2 percent in February, the same increase as in January.
Consumer Price Index - February 2011



  The Consumer Price Index for All Urban Consumers (CPI-U) increased

  0.5 percent in February on a seasonally adjusted basis, the U.S.

  Bureau of Labor Statistics reported today. Over the last 12 months,

  the all items index increased 2.1 percent before seasonal adjustment.

 

  Though the seasonally adjusted increase in the all items index was

  broad-based, the energy index was once again the largest contributor.

  The gasoline index continued to rise, and the index for household

  energy turned up in February with all of its components posting

  increases. Food indexes also continued to rise in February, with

  sharp increases in the indexes for fresh vegetables and meats

  contributing to a 0.8 percent increase in the food at home index, the

  largest since July 2008.

 

  The index for all items less food and energy rose in February as

  well. Most of its major components posted increases, including the

  indexes for shelter, new vehicles, medical care, and airline fares.

  The apparel index was one of the few to decline.

 

  The 12-month changes in major indexes continue to trend upward. The

  all items index increased 2.1 percent for the 12 months ending

  February; the figure was 1.1 percent as recently as November. The 12-

  month increase in the index for all items less food and energy

  reached 1.1 percent in February after being as low as 0.6 percent in

  October. The 11.0 percent increase in the energy index is the largest

  since May 2010, while the 2.3 percent rise in the food index is the

  largest since May 2009.



 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.

                              Aug.  Sep.  Oct.  Nov.  Dec.  Jan.  Feb.   ended 

                              2010  2010  2010  2010  2010  2011  2011   Feb.  

                                                                         2011  

                                                                                                                                                              

 All items..................    .2    .2    .2    .1    .4    .4    .5      2.1

  Food......................    .1    .3    .1    .2    .1    .5    .6      2.3

   Food at home.............    .0    .4    .1    .2    .2    .7    .8      2.8

   Food away from home (1)..    .3    .3    .1    .1    .1    .2    .2      1.6

  Energy....................   1.6   1.1   2.5    .1   4.0   2.1   3.4     11.0

   Energy commodities.......   2.6   2.2   4.4    .7   6.4   4.0   4.8     19.3

    Gasoline (all types)....   2.9   2.2   4.5    .7   6.7   3.5   4.7     19.2

    Fuel oil (1)............    .9    .8   4.7   4.2   4.9   6.8   5.8     27.1

   Energy services..........    .4   -.4    .0   -.8    .6   -.6   1.1       .2

    Electricity.............    .1   -.1    .2    .6    .3   -.5    .4      2.2

    Utility (piped) gas                                                        

       service..............   1.4  -1.4   -.6  -5.3   1.7  -1.2   3.4     -5.9

  All items less food and                                                      

     energy.................    .1    .0    .0    .1    .1    .2    .2      1.1

   Commodities less food and                                                   

      energy commodities....    .1   -.2   -.2    .0   -.1    .2    .2       .0

    New vehicles............    .2    .1   -.1   -.2   -.1   -.1   1.0       .9

    Used cars and trucks....    .9   -.4   -.6    .1   -.1   -.3    .1      1.9

    Apparel.................    .0   -.5   -.2    .1    .1   1.0   -.9      -.4

    Medical care commodities                                                   

       (1)..................    .2    .3    .1    .2    .1    .5    .7      2.7

   Services less energy                                                        

      services..............    .0    .1    .1    .2    .1    .1    .2      1.5

    Shelter.................    .0    .0    .1    .1    .1    .1    .1       .8

    Transportation services     .0    .3    .3    .4    .2    .6    .5      3.5

    Medical care services...    .2    .7    .2    .2    .3   -.1    .4      3.0



   1 Not seasonally adjusted.





  Consumer Price Index Data for February 2011

 

  Food

 

  The food index rose 0.6 percent in February after rising 0.5 percent

  in January. The food at home index, up 0.7 percent in January, rose

  0.8 percent in February. Five of the six major grocery store food

  groups posted increases. The index for fruits and vegetables

  increased the most, rising 2.2 percent as the fresh vegetables index

  increased 6.7 percent. The index for meats, poultry, fish, and eggs

  advanced 1.2 percent with the index for meats up 1.9 percent. The

  dairy and related products index increased 0.6 percent, as did the

  index for other food at home. The index for nonalcoholic beverages,

  which rose 1.5 percent in January, advanced 0.2 percent in February.

  The index for cereals and bakery products, which was unchanged in

  February, was the only major grocery store food group not to rise.

  Over the past 12 months, the index for food at home has risen 2.8

  percent with all six groups increasing. The index for food away from

  home rose 0.2 percent in February and has risen 1.6 percent over the

  past 12 months.

 

  Energy

 

  The energy index rose 3.4 percent in February and has risen 9.8

  percent over the last three months. The gasoline index continued to

  increase, climbing 4.7 percent in February after a 3.5 percent rise

  in January. (Before seasonal adjustment, gasoline prices rose 2.2

  percent in February.) The index for household energy, which fell 0.2

  percent in January, rose 1.3 percent in February. The fuel oil index

  rose 5.8 percent, the index for natural gas advanced 3.4 percent, and

  the electricity index increased 0.4 percent. The index for gasoline

  has risen 19.2 percent over the last 12 months; the household energy

  index has increased 1.4 percent over that span, with the fuel oil and

  electricity indexes rising but the index for natural gas declining.

 

 

  All items less food and energy

 

  The index for all items less food and energy rose 0.2 percent in

  February, the same increase as in January, with most of its major

  components posting increases. The shelter index rose 0.1 percent in

  February, with rent and owners' equivalent rent both also rising 0.1

  percent. After declining in January, the new vehicles index rose 1.0

  percent in February, its largest increase since October 2009. The

  medical care index rose 0.4 percent in February after a 0.1 percent

  increase in January. The index for medical care commodities rose 0.7

  percent and the medical care services index advanced 0.4 percent. The

  index for airline fares increased 2.1 percent in February, its fourth

  consecutive monthly increase of over two percent. The index for

  recreation rose 0.3 percent, its second straight monthly increase.

  The indexes for household furnishings and operations and for used

  cars and trucks both edged up 0.1 percent in February. In contrast to

  these increases, the apparel index turned down in February, declining

  0.9 percent after increasing 1.0 percent in January.

 

  The index for all items less food and energy increased 1.1 percent

  over the last 12 months. The shelter index has gone up 0.8 percent

  over that time period with the rent index up 1.1 percent. The indexes

  for airline fares, medical care, new vehicles, and used cars and

  trucks were among the indexes that increased over that span.  Indexes

  that declined include household furnishings and operations, apparel,

  and recreation.

 

 

 

  Not seasonally adjusted CPI measures

 

  The Consumer Price Index for All Urban Consumers (CPI-U) increased

  2.1 percent over the last 12 months to an index level of 221.309

  (1982-84=100). For the month, the index increased 0.5 percent prior

  to seasonal adjustment.

 

  The Consumer Price Index for Urban Wage Earners and Clerical Workers

  (CPI-W) increased 2.3 percent over the last 12 months to an index

  level of 217.535 (1982-84=100). For the month, the index rose 0.5

  percent prior to seasonal adjustment.

 

  The Chained Consumer Price Index for All Urban Consumers (C-CPI-U)

  increased 2.0 percent over the last 12 months. For the month, the

  index increased 0.5 percent on a not seasonally adjusted basis.

  Please note that the indexes for the post-2009 period are subject to

  revision.

 

  The Consumer Price Index for March 2011 is scheduled to be released

  on Friday, April 15, 2011, 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 32 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 cover approximately 87 percent of the total

  population and include 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 0.03 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 0.06 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 0.14 and 0.26 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 2010".  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/cpivar2010.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













  Regions Defined



  The states in the four regions shown in Tables 3 and 6 are listed

  below.



  The Northeast--Connecticut, Maine, Massachusetts, New Hampshire, New

  York, New Jersey, Pennsylvania, Rhode Island, and Vermont.

  The Midwest--Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota,

  Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

  The South--Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky,

  Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South

  Carolina, Tennessee, Texas, Virginia, West Virginia, and the District

  of Columbia.

  The West--Alaska, Arizona, California, Colorado, Hawaii, Idaho,

  Montana, Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.







  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-12-ARIMA Seasonal Adjustment Method.  Seasonally

  adjusted indexes and seasonal factors are computed annually.  Each

  year, the last 5 years of seasonally adjusted data are revised.  Data

  from January 2006 through December 2010 were replaced in January 2011.

  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 54 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 5 years, but the seasonally adjusted indexes before that

  period will not be changed.  Note: 37 of the 82 components are not

  seasonally adjusted for 2011.



  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.



  For the seasonal factors introduced in January 2011, BLS adjusted 29

  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 damage to oil

  refineries from Hurricane Katrina.



  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 David Levin at

  (202) 691-6968, or by e-mail at Levin.David@bls.gov.  If you have

  general questions about the CPI, please call our information staff at

  (202) 691-7000.