Since June 2014, decreases in crude oil and natural gas prices have reduced household energy costs. According to initial figures from the U.S. Bureau of Labor Statistics (BLS), the chained consumer price index for urban consumers (C-CPI-U) decreased by 1.2% from June 2014 to February 2016. Lower energy prices had a significant impact on this decrease in spite of increases in the food and shelter components of the overall index, which represent larger shares of household expenses. The overall index edged up 0.6% in March as real crude oil prices rose 18.1%, while natural gas prices continued to decline.
Between June 2014 and February 2016, the inflation-adjusted Brent crude oil and Henry Hub natural gas prices declined 71% and 56%, respectively. Prices for these two benchmarks are significant, as changes in the Brent crude oil price often lead to changes in gasoline, diesel, and heating oil costs, while changes in the Henry Hub price affect natural gas prices and, to a lesser extent, electricity prices. The energy component of the C-CPI-U decreased by 35.3%, reflecting the influence of declining spot prices on household energy prices.
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