CPI for all items rises 0.4% in October as gasoline and shelter indexes rise

[mahatmakanejeeves]

I'm catching up with last week's BLS releases. There's a lot of explanatory material in this release. Because it is from the gummint, I am overlooking the usual four-paragraph fair use limit.

CPI for all items rises 0.4% in October as gasoline and shelter indexes rise

Economic News Release USDL-16-2166

Consumer Price Index Summary

Transmission of material in this release is embargoed until 8:30 a.m. (EST) November 17, 2016

Technical information: [phone] [email protected] www.bls.gov/cpi
Media Contact: [phone] [email protected]

CONSUMER PRICE INDEX – OCTOBER 2016

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in October on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.6 percent before seasonal adjustment.

As in September, increases in the shelter and gasoline indexes were the main causes of the rise in the all items index. The gasoline index rose 7.0 percent in October and accounted for more than half of the increase in the all items index. The shelter index increased 0.4 percent for the second straight month.

The energy index increased 3.5 percent, its largest advance since February 2013. The indexes for fuel oil and gasoline were up 5.9 percent and 7.0 percent, respectively, while the indexes for electricity and natural gas saw relatively smaller increases of 0.4 percent and 0.9 percent. In contrast, the index for food was unchanged for the fourth consecutive month, as the food at home index continued to decline.

The index for all items less food and energy rose 0.1 percent for the second straight month. Along with the shelter index, the indexes for apparel, new vehicles, and motor vehicle insurance all increased in October, as did the indexes for education, household furnishings and operations, alcoholic beverages, and tobacco. The indexes for personal care, communication, used cars and trucks, recreation, and airfare all declined. The medical care index was flat over the month.

The all items index rose 1.6 percent for the 12 months ending October, its largest 12-month increase since October 2014. The index for all items less food and energy rose 2.1 percent for the 12 months ending October. The food index declined 0.4 percent over the span, while the energy index rose 0.1 percent.
....

The Consumer Price Index for November 2016 is scheduled to be released on Thursday, December 15, 2016, at 8:30 a.m. (EST).

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Consumer Price Index Geographic Revision for 2018

In January 2018, BLS will introduce a new geographic area sample for the Consumer Price
Index (CPI). The 2018 revision utilizes the 2010 Decennial Census and incorporates an
updated area sample design, changes the frequency of publication for several local area
indexes, and establishes some new local area and aggregate indexes. The first indexes
using the new structure will be published in February 2018. Additional information on
the geographic revision is available at: www.bls.gov/cpi/georevision2018.htm.
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Facilities for Sensory Impaired

Information from this release will be made available to sensory impaired individuals upon request. Voice phone: [phone], 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 28 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 covers approximately 89 percent of the total population and includes, 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, 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 6,000 housing units and approximately 24,000 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 www.bls.gov/cpi/ or contact our CPI Information and Analysis Section on [phone].




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 0.04 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 0.08 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 0.12 and 0.28 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 2014." These data are available on the CPI home page (www.bls.gov/cpi), or by using the following link: www.bls.gov/cpi/cpivar2014.pdf.
....

Contact Information

For additional information on seasonal adjustment in the CPI, please contact us at [phone] or [email protected]. If you have general questions about the CPI, please contact our information staff at [phone] or [email protected].

Previously at DU:

CPI for all items rises 0.3% in September as gasoline and shelter indexes rise

Whoops, that's a dupe. Try:

CPI for all items rises 0.3% in September as gasoline and shelter indexes rise

CPI for all items rises 0.3% in September as gasoline and shelter indexes rise

Economic News Release USDL-16-2023

Consumer Price Index Summary

Transmission of material in this release is embargoed until 8:30 a.m. (EDT) October 18, 2016

Technical information: [phone] [email protected] www.bls.gov/cpi
Media Contact: [phone] [email protected]

CONSUMER PRICE INDEX – SEPTEMBER 2016

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.3 percent in September on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.5 percent before seasonal adjustment.
....

Facilities for Sensory Impaired

Information from this release will be made available to sensory impaired individuals upon request. Voice phone: [phone], 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 28 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 covers approximately 89 percent of the total population and includes, 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.

-- -- -- --

Previously at DU:

CPI for all items unchanged in July; gasoline index falls, shelter index rises again


[center]Facilities for Sensory Impaired[/center]

Information from this release will be made available to sensory impaired individuals upon request. Voice phone: [phone], Federal Relay Services: 1-800-877-8339.

Previously at DU:

CPI for May 2016: CPI for all items increases 0.2% in May as energy, shelter increases outweigh food decline

CPI for April 2016: CPI for all items increases 0.4% as gasoline, shelter, food indexes rise

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 28 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 covers approximately 89 percent of the total population and includes, 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.....

For further details visit the CPI home page on the Internet at www.bls.gov/cpi/ or contact our CPI Information and Analysis Section on [phone].

Read more: http://www.bls.gov/news.release/cpi.nr0.htm

Not all CPI's are alike. For an earlier discussion at DU about that, see:

CPI for all items falls 0.1% in December as energy and food indexes decline

and

CPI for all items rises 0.2% as gasoline and shelter prices rise; food prices decline

From the zeroeth post:

I added the bolding.

Cryptoad points out the significance of the CPI-W. It is used to calculate Social Security's Cost-of-Living Adjustment (COLA):

Based on the increase in the Consumer Price Index (CPI-W) from the third quarter of 2013 through the third quarter of 2014, Social Security and Supplemental Security Income (SSI) beneficiaries will receive a 1.7 percent COLA for 2015.

Consumer Price Index Frequently Asked Questions (FAQs)

What goods and services does the CPI cover?

The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:
FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)
HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)
APPAREL (men's shirts and sweaters, women's dresses, jewelry)
TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)
MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)
RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);
EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories);
OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

The CPI-U is used by the Treasury Department to set the interest rates on I Bonds.

I Savings Bonds

How do I Bonds earn interest?

Interest on an I Bond rates is a combination of two rates:
1.A fixed rate of return which remains the same throughout the life of the I Bond

and
2.A variable inflation rate which we calculate twice a year, based on changes in the nonseasonally adjusted Consumer Price Index for all Urban Consumers (CPI-U) for all items, including food and energy (CPI-U for March compared with the CPI-U for September of the same year, and then CPI-U for September compared with the CPI-U for March of the following year).

In specific, there is a discussion of the Cost of Living Index here:

Let's look at that.

The CPI-W is discussed here:

CPI-W methodology

[doc03]

1. CPI goes up .4% for the month of October. The SS COLA is going up just .3%

for the entire year? The .3% COLA will give me a whopping $4.50 a month raise and Medicare will take that also
my Medicare supplement is going up $12 a month. Obama even kicked around the idea of a chained CPI that would
reduce the COLA even more. Lord only knows what pResident Putin The Turtle and Eddie Munster will come up with. As long as they screw the next generation instead of themselves the Trumpsters will go along with it.