March 2017 Consumer Price Index

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

The Consumer Price Index for All Urban Consumers (CPI-U) decreased 0.3 percent in March on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 2.4 percent before seasonal adjustment.

The March decline was the first 1-month decrease in the seasonally adjusted all items index since February 2016. A decline in the gasoline index was the largest factor, with a decrease in the index for wireless telephone services also contributing. The energy index declined 3.2 percent, with the gasoline index falling 6.2 percent, and other major energy component indexes decreasing as well. The food index rose 0.3 percent, with the index for food at home increasing 0.5 percent, its largest increase since May 2014.

The index for all items less food and energy fell 0.1 percent in March, its first decline since January 2010. The shelter index rose 0.1 percent, and the indexes for motor vehicle insurance, medical care, tobacco, airline fares, and alcoholic beverages also increased in March. These increases were more than offset by declines in several indexes, including those for wireless telephone services, used cars and trucks, new vehicles, and apparel.

The all items index rose 2.4 percent for the 12 months ending March, a smaller increase than the 2.7-percent rise for the period ending February. The index for all items less food and energy rose 2.0 percent over the last 12 months, the smallest 12-month increase since November 2015. The energy index rose 10.9 percent over the last year, while the food index increased 0.5 percent.

Seasonally adjusted changes from preceding month Un- adjusted 12-mos. Sep. Oct. Nov. Dec. Jan. Feb. Mar. ended 2016 2016 2016 2016 2017 2017 2017 Mar. 2017

Food

The food index rose 0.3 percent in March following a 0.2-percent increase in February. The index for food at home advanced 0.5 percent, as 4 of the 6 major grocery store food group indexes rose. The index for fruits and vegetables rose 1.6 percent, with the index for fresh fruits rising 2.4 percent. The index for other food at home rose 0.7 percent after declining in February. The indexes for cereals and bakery products and for meats, poultry, fish, and eggs both increased 0.3 percent. In contrast to these increases, the index for dairy and related products fell 0.6 percent in March after rising in each of the 3 prior months. The index for nonalcoholic beverages also declined, falling 0.1 percent after rising in February.

The food at home index declined 0.9 percent over the past year. The indexes for meats, poultry, fish, and eggs, for fruits and vegetables, and for cereals and bakery products declined over the past 12 months, while the other 3 major grocery store food group indexes increased slightly over the span. The index for food away from home rose 0.2 percent in March, the same increase as in February, and rose 2.4 percent over the last 12 months.

Energy

The energy index fell 3.2 percent in March following a 1.0-percent decline in February. All the energy component indexes declined in March, with the gasoline index falling 6.2 percent. (Before seasonal adjustment, gasoline prices increased 1.1 percent in March.) The index for natural gas fell 0.8 percent after rising in each of the last 8 months, and the electricity index declined 0.1 percent after rising in February.

Despite the March declines, all the component indexes rose over the last year. The gasoline index increased 19.9 percent, the index for natural gas advanced 10.3 percent, and the electricity index increased 1.6 percent.

All items less food and energy

The index for all items less food and energy declined 0.1 percent in March. The index for communication fell 3.5 percent as the index for wireless telephone services decreased 7.0 percent, the largest 1-month decline in the history of the index. The index for used cars and trucks continued to fall, declining 0.9 percent in March, and the new vehicles index decreased 0.3 percent. The apparel index declined 0.7 percent in March after rising 0.6 percent in February.

The shelter index rose 0.1 percent in March, its smallest increase since June 2014. The rent index rose 0.3 percent and the index for owners' equivalent rent advanced 0.2 percent, but the index for lodging away from home fell 2.4 percent. The medical care index increased 0.1 percent in March, as the index for hospital services rose 0.4 percent, the index for prescription drugs was unchanged, and the physicians' services index declined 0.3 percent.

The index for motor vehicle insurance continued to rise, increasing 1.2 percent in March. The index for tobacco rose 0.5 percent, the airline fares index increased 0.4 percent, and the index for alcoholic beverages rose 0.2 percent. The indexes for recreation, for education, and for household furnishings and operations were unchanged in March.

The index for all items less food and energy rose 2.0 percent over the past 12 months. The indexes for shelter and for medical care both rose 3.5 percent. The index for motor vehicle insurance increased sharply over the last year, rising 8.1 percent, its largest 12-month increase since the period ending June 2003. The indexes for communication, used cars and trucks, and household furnishings and operations all declined over the past year.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 2.4 percent over the last 12 months to an index level of 243.801 (1982-84=100). For the month, the index rose 0.1 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 237.656 (1982-84=100). For the month, the index increased 0.1 percent prior to seasonal adjustment.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 2.4 percent over the last 12 months. For the month, the index rose 0.1 percent on a not seasonally adjusted basis. Please note that the indexes for the past 10 to 12 months are subject to revision.

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.

A Note on the Use of Seasonally Adjusted and Unadjusted Data

Introduction

The Consumer Price Index (CPI) produces both unadjusted and seasonally adjusted data. Seasonally adjusted data are computed using seasonal factors derived by the X-13ARIMA-SEATS Seasonal Adjustment Method. These factors are updated each February, and the new factors are used to revise the previous five years of seasonally adjusted data. For more information on data revisions and exceptions to the usual revision schedule, please see the Fact Sheet on Seasonal Adjustment (https://www.bls.gov/cpi/cpisaqanda.htm) and the Timeline of Seasonal Adjustment Methodological Changes (https://www.bls.gov/cpi/cpiseastimeline.htm).

How to Use Seasonally Adjusted and Unadjusted Data

For analyzing short-term 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. This allows data users to focus on changes that are not typical for the time of year. The unadjusted data are of primary interest to consumers concerned about the prices they actually pay. Unadjusted data are also 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. BLS advises against the use of seasonally adjusted data in escalation agreements because seasonally adjusted series are revised annually.

Intervention Analysis

The Bureau of Labor Statistics uses Intervention Analysis Seasonal Adjustment for some CPI series. Sometimes extreme values or sharp movements can distort the underlying seasonal pattern of price change. Intervention Analysis Seasonal Adjustment is a process by which the distortions caused by such unusual events are estimated and removed from the data prior to calculation of seasonal factors. The resulting seasonal factors, which more accurately represent the seasonal pattern, are then applied to the unadjusted data.

2017 Series Adjusted Using Intervention Analysis Seasonal Adjustment

For the seasonal factors introduced in January 2017, BLS adjusted 40 series using Intervention Analysis Seasonal Adjustment, including selected food and beverage items, motor fuels and natural gas. For example, this procedure was used for the Motor fuel series to offset the effects of events such as the 2009 return to normal pricing after the worldwide economic downturn in 2008.

Revision of Seasonally Adjusted Indexes

Seasonally adjusted data, including the U.S. city average All items index levels, are subject to revision for up to five years after their original release. Every year, economists in the CPI calculate new seasonal factors for seasonally adjusted series and apply them to the last five years of data. Seasonally adjusted indexes beyond the last five years of data are considered to be final and not subject to revision. In January 2017, revised seasonal factors and seasonally adjusted indexes for 2012-2016 were calculated and published. For directly adjusted series, the seasonal factors for 2016 will be applied to data in 2017 to produce the seasonally adjusted 2017 indexes.

Determining Seasonal Status

Each year the seasonal status of every series is reevaluated based upon certain statistical criteria. Using these criteria, BLS economists determine whether a series should change its status: from "not seasonally adjusted" to "seasonally adjusted", or vice versa. If any of the 81 components of the U.S. city average all items index 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 five years, but the seasonally adjusted indexes before that period will not be changed. 27 of the 81 components of the U.S. city average all items index are not seasonally adjusted for 2017.

Contact Information

For additional information on seasonal adjustment in the CPI, please contact us at (202)691-6968 or cpiseas@bls.gov. If you have general questions about the CPI, please call our information staff at (202) 691-7000 or cpi_info@bls.gov.

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.