May 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 0.1 percent in May on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index rose 1.9 percent.

A decrease in the energy index was the main contributor to the monthly decrease in the all items index. The energy index fell 2.7 percent, led by a decline of 6.4 percent in the gasoline index. The food index rose 0.2 percent, due to increases in four of the six major grocery store food group indexes.

The index for all items less food and energy rose 0.1 percent in May, as it did in April. The shelter index increased 0.2 percent over the month. However, many indexes declined in May, including those for apparel, airline fares, communication, and medical care services.

The all items index rose 1.9 percent for the 12 months ending May, a smaller increase than the 2.2- percent rise for the 12 months ending April. This month’s increase is still a larger rise than the 1.6- percent average annual increase over the past 10 years. The index for all items less food and energy rose 1.7 percent over the previous 12 months; this compares to a 1.8-percent average annual increase over the past decade. The energy index rose 5.4 percent over the last year, while the food index increased 0.9 percent.

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

Food

The food index rose 0.2 percent in May, its fifth consecutive monthly increase. The index for food at home advanced 0.1 percent, with the major grocery store food group indexes mixed. The nonalcoholic beverages and beverage materials index rose 1.1 percent in May. The index for meats, poultry, fish, and eggs rose 0.3 percent, after a 0.6-percent decline in April. The dairy and related products index also increased 0.3 percent in May, as did the index for cereals and bakery products.

The remaining major grocery store food group indexes declined in May. The fruits and vegetables index declined 0.6 percent in May after a 2.2-percent increase in April. The index for other food at home fell slightly in May, decreasing 0.1 percent.

The food at home index fell 0.2 percent over the past year, due in large part to the impact of a 2.1-percent decline in the index for meats, poultry, fish, and eggs over that time period. The index for cereals and bakery products declined 0.2 percent over the same period. The index for nonalcoholic beverages posted an increase of 0.9 percent over the past 12 months, while the fruits and vegetables index increased 0.8 percent. The indexes for dairy and other food at home posted smaller increases. The index for food away from home advanced 0.2 percent in May, and rose 2.3 percent over the last 12 months.

Energy

The energy index decreased 2.7 percent in May following a 1.1-percent increase in April. The gasoline index fell 6.4 percent in May after a 1.2-percent increase in April. (Before seasonal adjustment, gasoline prices decreased 1.4 percent in May.) The index for natural gas rose 1.9 percent, and the electricity index increased 0.3 percent over the month.

All of the energy component indexes increased over the last year. The gasoline index rose 5.8 percent, and the index for natural gas increased 12.8 percent. The electricity index advanced more modestly, rising 2.7 percent.

All items less food and energy

The index for all items less food and energy increased 0.1 percent in May, as it did in April. The shelter index rose 0.2 percent, as the rent index increased 0.3 percent, and the index for owners' equivalent rent advanced 0.2 percent. The index for lodging away from home rose 0.1 percent after increasing 2.1 percent in April. The index for motor vehicle insurance increased 1.1 percent in May, returning to a longstanding upward trend after a decline of 0.4 percent in the preceding month.

Several indexes posted declines in May. The indexes for communication, new vehicles, and used cars and trucks all declined 0.2 percent over the month. Indexes for apparel and alcoholic beverages also declined.

The medical care index was unchanged in May, with medical care component indexes mixed. The physicians' services index fell 0.2 percent. The index for prescription drugs increased 0.3 percent, and the hospital services index rose 0.1 percent.

The index for all items less food and energy rose 1.7 percent over the past 12 months. The shelter index rose 3.3 percent over the year, and the index for medical care rose 2.7 percent. The education index rose 2.3 percent over the last 12 months. The index for recreation increased by 0.9 percent over the past year, while the index for communication fell 6.3 percent.

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.9 percent over the last 12 months to an index level of 244.733 (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 1.8 percent over the last 12 months to an index level of 238.609 (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 1.7 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.