The Consumer Price Index for All Urban Consumers (CPI-U) in the Detroit-Ann Arbor-Flint area rose 1.2 percent from June to August, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Charlene Peiffer noted that the energy index rose 8.0 percent while the food index fell 0.3 percent over the bi-monthly period. The index for all items less food and energy rose 0.5 percent. Among the indexes within the all items less food and energy category, prices were higher for shelter and apparel while prices were lower for new and used motor vehicles. (Data in this report are not seasonally adjusted. Accordingly, month-to-month changes may reflect the impact of seasonal influences.)

Over the past 12 months the CPI-U rose 1.5 percent in Detroit. The energy index was up 2.3 percent over-the-year due to increases in prices for gasoline and electricity. The index for all items less food and energy rose 1.6 percent over the year.

Food

Food prices were down 0.3 percent from June to August, after remaining unchanged over the previous bi-monthly period. Between the two components of the food index, prices for food at home (groceries) fell 0.4 percent while prices for food away from home (restaurant, cafeteria, and vending purchases) edged down 0.1 percent. Grocery prices edged 0.1 percent higher from August a year ago while prices for food away from home were 0.7 percent higher. From August 2011 to August 2012, overall food prices advanced 0.3 percent.

Energy

The energy index for Detroit rose 8.0 percent from June to August after falling 7.2 percent in the previous bi-monthly period. Within the energy category, prices for gasoline (6.9 percent), utility (piped) gas service (8.0 percent) and electricity (11.6 percent) all rose from June to August.

From August 2011 to August 2012, overall energy prices rose 2.3 percent. Gasoline and electricity prices increased 4.3 percent and 8.3 percent, respectively, while prices for utility (piped) gas service declined 7.2 percent over the same period.

All items less food and energy

The index for all items less food and energy rose 0.5 percent from June to August. Among the index’s components, prices for shelter and apparel rose 0.5 percent and 3.8 percent, respectively, while prices for new and used motor vehicles fell.

Over the year, the index for all items less food and energy rose 1.6 percent. Increases in costs for shelter (1.7 percent), recreation (5.1 percent), and medical care (3.3 percent) were contributing factors.

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The October 2012 Consumer Price Index for Detroit is scheduled to be released on November 15, 2012, at 8:30 a.m. (ET).

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

The Detroit-Ann Arbor-Flint, Mich. consolidated area covered in this release is comprised of Genesee, Lapeer, Lenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, and Wayne Counties in Michigan.

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.