The Consumer Price Index for All Urban Consumers (CPI-U) in the Boston-Brockton-Nashua area edged down 0.5 percent in January, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Deborah A. Brown noted that the two-month decrease was mainly due to lower prices paid by area consumers for all items less food and energy, down 0.4 percent and energy, down 4.3 percent. Higher food prices, up 1.3 percent over two months, partially offset this decrease. (Data in this report are not seasonally adjusted. Accordingly, bimonthly changes may reflect the impact of seasonal influences.)

Over the last 12 months the Boston CPI-U rose 1.0 percent. The increase was largely attributable to higher prices within all items less food and energy, up 2.3 percent. (See chart 1.) Lower energy prices paid by area consumers, down 14.4 percent, partially offset the modest increase.

 

Food

Food prices advanced 1.3 percent since November. A rise in grocery store prices (1.4 percent), also known as food at home, led this increase. Higher restaurant prices, up 1.2 percent, over the two month period, contributed also, but, to a lesser extent.

From January 2015 to January 2016 the index for food rose 2.3 percent due to higher restaurant prices, also known as food away from home, (+3.9 percent) and, to a lesser extent, higher grocery store prices (+1.4 percent).

Energy

The energy index was down 4.3 percent over the two months, mainly due to lower gasoline prices (-9.7 percent), and, to a lesser extent, lower fuel oil prices (-16.5 percent). Area motorists paid $1.951 per gallon of gasoline in January. Increases in prices paid by local households for electricity (4.8 percent) partially offset the decrease in the energy index.

Energy prices were down 14.4 percent from a year ago, largely attributable to lower gasoline prices, down 13.2 percent. Contributing to the decline were lower prices paid by area consumers for electricity, down 9.9 percent from one year ago and utility (piped) gas, down 15.6 percent over the same period.

All items less food and energy

The index for all items less food and energy edged down 0.4 percent from November. Decreases in clothing costs (-7.6 percent) and, to a lesser extent, medical care and shelter (-1.4 and 0.3 percent, respectively) attributed to this overall decline.

Over the year, the index for all items less food and energy rose 2.3 percent, with higher shelter costs, rising 3.2 percent from January 2015, being the main cause of this increase. This marked the 55th consecutive annual increase in the local shelter index. Contributing to the decline were higher prices paid by area consumers for medical care, up 4.8 percent from one year ago, and education and communication, up 3.7 percent over the same period.

CPI-W

In January, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was 256.262. The CPI-W was down 0.3 percent over two months and increased 0.7 percent over the year.

The March 2016 Consumer Price Index for Boston-Brockton-Nashua is scheduled to be released on Thursday, April 14, 2016, 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 89 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 28 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 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.

The index measures price change 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 https://www.bls.gov/opub/hom/pdf/homch17.pdf. 

In calculating the index, price changes for the various items in each location are averaged together withweights 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 Boston-Brockton-Nashua, Mass.-N.H.-Maine-Conn. consolidated area covered in this release is comprised of Essex, Middlesex, Norfolk, Plymouth and Suffolk Counties and parts of Bristol, Hampden, and Worcester Counties in Massachusetts; parts of Hillsborough, Merrimack, Rockingham, and Strafford Counties in New Hampshire; part of York County in Maine; and part of Windham County in Connecticut.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: (202) 691-5200; Federal Relay Service (800) 877-8339.