CPI unchanged in November as energy declines offset increases in other categories

Published: December 19, 2011
 Consumer Price Index - November 2011

 The Consumer Price Index for All Urban Consumers (CPI-U) was
 unchanged in November on a seasonally adjusted basis, the U.S. Bureau
 of Labor Statistics reported today. Over the last 12 months, the all
 items index increased 3.4 percent before seasonal adjustment.
 
 The energy index declined for the second month in a row and offset
 increases in the indexes for food and all items less food and energy.
 As in October, the gasoline index fell sharply and the index for
 household energy declined as well. The food index rose slightly in
 November, though the index for food at home declined as four of the
 six major grocery store food group indexes fell.
 
 The index for all items less food and energy increased 0.2 percent in
 November following increases of 0.1 percent in each of the prior two
 months. The indexes for shelter, medical care, apparel, and personal
 care all rose. These increases more than offset declines in the
 indexes for new vehicles and used cars and trucks.
 
 The all items index has risen 3.4 percent over the last 12 months.
 This is a slightly smaller increase than last month's 3.5 percent
 figure, as the 12-month change in the energy index declined from 14.2
 percent to 12.4 percent. The 12-month change in the food index also
 declined slightly, from 4.7 percent to 4.6 percent. In contrast, the
 12-month change in the index for all items less food and energy
 continued to rise, reaching 2.2 percent in November.

 
 
 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.
                              May   June  July  Aug.  Sep.  Oct.  Nov.   ended 
                              2011  2011  2011  2011  2011  2011  2011   Nov.  
                                                                         2011  
                                                                                                                                                              
 All items..................    .2   -.2    .5    .4    .3   -.1    .0      3.4
  Food......................    .4    .2    .4    .5    .4    .1    .1      4.6
   Food at home.............    .5    .2    .6    .6    .6    .1   -.1      5.9
   Food away from home (1)..    .2    .3    .2    .4    .2    .2    .3      2.9
  Energy....................  -1.0  -4.4   2.8   1.2   2.0  -2.0  -1.6     12.4
   Energy commodities.......  -1.9  -6.3   4.3   1.6   2.7  -2.9  -2.1     19.9
    Gasoline (all types)....  -2.0  -6.8   4.7   1.9   2.9  -3.1  -2.4     19.7
    Fuel oil (1)............   -.8  -2.2  -1.7   -.4   -.7   -.5   2.7     25.0
   Energy services..........    .6  -1.1    .4    .4    .7   -.4   -.7      1.7
    Electricity.............    .8  -1.6    .8   -.1    .7    .4    .4      2.7
    Utility (piped) gas                                                        
       service..............   -.3    .4  -1.2   2.2    .8  -3.0  -4.4     -1.3
  All items less food and                                                      
     energy.................    .3    .3    .2    .2    .1    .1    .2      2.2
   Commodities less food and                                                   
      energy commodities....    .5    .5    .3    .4   -.2   -.1    .1      2.2
    New vehicles............   1.1    .6    .0    .0    .0   -.3   -.3      3.3
    Used cars and trucks....   1.1   1.6    .7    .9   -.6   -.6   -.1      4.9
    Apparel.................   1.2   1.4   1.2   1.1  -1.1    .4    .6      4.8
    Medical care commodities                                                   
       (1)..................    .0   -.1    .0    .1    .2    .3    .2      3.1
   Services less energy                                                        
      services..............    .2    .1    .2    .2    .2    .2    .2      2.1
    Shelter.................    .2    .2    .3    .2    .1    .2    .2      1.8
    Transportation services     .1   -.3   -.1    .2    .5    .1    .1      2.6
    Medical care services...    .3    .3    .3    .3    .2    .5    .5      3.5

   1 Not seasonally adjusted.



 Consumer Price Index Data for November 2011
 
 Food
 
 The food index rose 0.1 percent in November, the same increase as in
 October. The index for food at home, however, declined for the first
 time since June 2010, falling 0.1 percent. The fruits and vegetables
 index, which fell 1.7 percent in October, declined 0.6 percent in
 November, as both the fresh fruits and fresh vegetables indexes
 continued to decline. The index for dairy and related products fell
 0.3 percent in November while the indexes for meats, poultry, fish,
 and eggs and for other food at home both decreased 0.1 percent. The
 only major grocery store food groups to post increases were cereal
 and bakery products, which rose 0.3 percent, and nonalcoholic
 beverages, which increased 0.2 percent. Despite the November
 decrease, the index for food at home has risen 5.9 percent over the
 past year with all six major grocery store food groups up at least
 4.4 percent. The index for food away from home increased 0.3 percent
 in November after rising 0.2 percent in October and has risen 2.9
 percent over the past year.
 
 
 Energy
 
 The energy index, which fell 2.0 percent in October, declined 1.6
 percent in November as gasoline prices continued to fall. The
 gasoline index decreased 2.4 percent in November following a 3.1
 percent decline in October.  (Before seasonal adjustment, gasoline
 prices fell 1.1 percent in November.) The household energy index
 declined in November as well, falling 0.4 percent. A 4.4 percent
 decline in the index for natural gas more than offset a 2.7 percent
 increase in the fuel oil index and a 0.4 percent rise in the index
 for electricity. Energy indexes are still mostly up over the past
 year despite the November declines. The gasoline index has increased
 19.7 percent, while the household energy index has risen 3.1 percent
 with the fuel oil index up 25.0 percent, the electricity index up 2.7
 percent, but the natural gas index down 1.3 percent.
 
 
 All items less food and energy
 
 The index for all items less food and energy increased 0.2 percent in
 November, the largest increase since August. As was the case last
 month, increases in the indexes for shelter, medical care, and
 apparel accounted for most of the increase. The shelter index rose
 0.2 percent, the same increase as in October, as the rent index rose
 0.2 percent and the index for owners' equivalent rent increased 0.1
 percent. The index for medical care, which rose 0.5 percent in
 October, rose 0.4 percent in November with the medical care services
 index repeating its October increase of 0.5 percent. The apparel
 index increased 0.6 percent in November following a 0.4 percent
 increase in October and has now risen in seven of the last eight
 months. The index for personal care rose notably in November,
 increasing 0.6 percent, while the tobacco and recreation indexes both
 posted slight increases. In contrast, the new vehicles index fell 0.3
 percent and the index for used cars and trucks declined 0.1 percent.
 
 The index for all items less food and energy has increased 2.2
 percent over the last 12 months, the largest such increase since
 2008. The 12-month change in the shelter index has been steadily
 increasing and reached 1.8 percent in November. The 12-month change
 in the medical care index was 3.4 percent, its highest level in over
 a year, while the apparel index has risen 4.8 percent over the last
 12 months, the largest figure since 1991.
 
 Not seasonally adjusted CPI measures
 
 The Consumer Price Index for All Urban Consumers (CPI-U) increased
 3.4 percent over the last 12 months to an index level of 226.230
 (1982-84=100). For the month, the index declined 0.1 percent prior to
 seasonal adjustment.
 
 The Consumer Price Index for Urban Wage Earners and Clerical Workers
 (CPI-W) increased 3.8 percent over the last 12 months to an index
 level of 222.813  (1982-84=100). For the month, the index declined
 0.1 percent prior to seasonal adjustment.
 
 The Chained Consumer Price Index for All Urban Consumers (C-CPI-U)
 increased 3.2 percent over the last 12 months. For the month, the
 index declined 0.1 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 December 2011 is scheduled to be released
 on Thursday, January 19, 2012, at 8:30 a.m. (EST). Releases for the
 remainder of 2012 are scheduled on the following dates:

                    Feb. 17             Aug. 15
                    Mar. 16             Sep. 14
                    Apr. 13             Oct. 16
                    May 15              Nov. 15
                    June 14             Dec. 14
                    July 17








 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.
CPI unchanged in November as energy declines offset increases in other categories

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