Consumer Price Index Summary
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Patrick C. Jackman (202) 691-7000 USDL-01-304
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INTERNET ADDRESS: Tuesday, September 18, 2001
http://www.bls.gov/cpihome.htm
CONSUMER PRICE INDEX: AUGUST 2001
The Consumer Price Index for All Urban Consumers (CPI-U) was
unchanged in August, before seasonal adjustment, remaining at a level of
177.5 (1982-84=100), the Bureau of Labor Statistics of the U.S. Department
of Labor reported today. For the 12-month period ended in August, the CPI-
U increased 2.7 percent.
The Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) also was unchanged in August, prior to seasonal adjustment. The
August level of 173.8 was 2.7 percent higher than the index in August
2000.
CPI for All Urban Consumers (CPI-U)
On a seasonally adjusted basis, the CPI-U rose 0.1 percent in August,
following a 0.3 percent decline in July. The energy index declined for
the third consecutive month--down 1.9 percent in August, following a 5.6
percent drop in July. In August, the index for petroleum-based energy
declined 2.4 percent and the index for energy services fell 1.4 percent.
The food index, which increased 0.3 percent in July, rose 0.2 percent in
August. Excluding food and energy, the CPI-U rose 0.2 percent, the same
as in July. Larger increases in the indexes for shelter--up 0.5 percent
in August, following a 0.1 percent increase in July--and medical care were
offset by a downturn in the index for tobacco and smoking products and a
larger decline in airline fares.
Table A. Percent changes in CPI for Urban Consumers (CPI-U)
Seasonally adjusted Un-
Compound adjusted
Expenditure Changes from preceding month annual rate 12-mos.
Category 2001 3-mos. ended ended
Feb. Mar. Apr. May June July Aug. Aug. '01 Aug. '01
All Items .3 .1 .3 .4 .2 -.3 .1 .0 2.7
Food and beverages .5 .2 .2 .2 .4 .3 .2 3.8 3.1
Housing .2 .2 .1 .4 .4 .0 .3 2.8 4.2
Apparel .8 .4 -1.3 -.9 -.3 -.6 -.6 -5.8 -2.2
Transportation .4 -.9 .9 1.2 -.2 -2.3 -.5 -11.1 .1
Medical care .5 .4 .4 .3 .4 .1 .5 4.2 4.5
Recreation .1 -.1 .9 -.1 -.2 .2 .2 .8 1.2
Education and
communication .1 .5 -.1 .1 .5 .5 .5 5.9 2.9
Other goods and
services .5 .1 1.3 -.4 .4 1.6 -.9 4.6 4.3
Special Indexes
Energy -.2 -2.1 1.8 3.1 -.9 -5.6 -1.9 -29.0 2.8
Food .5 .2 .1 .3 .4 .3 .2 3.8 3.1
All Items less
food and energy .3 .2 .2 .1 .3 .2 .2 2.8 2.7
See page 4 for a note on planned changes in the CPI in 2002.
During the first eight months of 2001, the CPI-U rose at a 2.5
percent seasonally adjusted annual rate (SAAR). This compares with an
increase of 3.4 percent for all of 2000. The index for energy, which
registered double-digit increases in both 1999 and 2000, declined at a 3.3
percent SAAR during the first eight months of 2001. Food costs, which
rose 2.8 percent in all of 2000, have increased at a 3.5 percent SAAR thus
far in 2001. Excluding food and energy, the CPI-U has advanced at a 2.9
percent SAAR thus far in 2001, compared with a 2.6 percent rise for all of
2000. Acceleration in the indexes for shelter, for medical care, and for
tobacco and smoking products have contributed to the larger rate of
advance thus far this year.
The food and beverages index increased 0.2 percent in August. The
index for food at home, which rose 0.3 percent in July, increased 0.1
percent in August. Downturns in the indexes for fruits and vegetables and
for meats, poultry, fish, and eggs were largely responsible for the
moderation in grocery store food prices. The index for fruits and
vegetables, which was unchanged in July, declined 0.6 percent in August.
A 2.6 percent decline in the index for fresh fruits more than offset
increases in the indexes for fresh vegetables and for processed fruits and
vegetables--up 0.9 and 0.3 percent, respectively. The index for meats,
poultry, fish, and eggs fell 0.4 percent. Beef prices declined for the
second consecutive month--down 0.7 percent in August. Despite these
declines, beef prices are 7.0 percent higher than in August 2000. The
indexes for poultry and pork rose 0.5 and 0.2 percent, respectively. The
index for nonalcoholic beverages rose 0.9 percent, reflecting a sharp
upturn in the price of carbonated drinks. The index for dairy products
rose 0.4 percent in August. Increases in the indexes for ice cream and
for cheese more than offset a 0.4 percent decline in milk prices. The
other two major food at home groups--cereal and bakery products and other
food at home--rose 0.4 and 0.2 percent, respectively. The other two
components of the food and beverages index--food away from home and
alcoholic beverages--each increased 0.3 percent.
The housing index, which was unchanged in July, increased 0.3 percent
in August. Shelter costs, which increased 0.1 percent in July, rose 0.5
percent in August. Within shelter, the index for rent rose 0.4 percent;
owners' equivalent rent rose 0.5 percent; and the index for lodging away
from home increased 1.0 percent. The index for fuels and utilities
declined for the second consecutive month--down 1.0 percent in August.
All three major household fuels registered price decreases: the index for
fuel oil declined 1.2 percent and the indexes for natural gas and for
electricity fell 3.4 and 0.4 percent, respectively. The index for
household furnishings and operations, which was unchanged in July,
declined 0.1 percent in August.
The transportation component declined for the third consecutive month-
-down 0.5 percent in August--reflecting another drop in gasoline prices.
The index for gasoline registered its third consecutive decrease in August-
-down 2.4 percent. As of August, gasoline prices were 17.0 percent lower
than their peak level of May 2001. The index for new vehicles declined
0.2 percent in August. (Prior to seasonal adjustment, prices for new
vehicles fell 0.6 percent.) The index for used cars and trucks declined
for the fifth consecutive month--down 0.2 percent in August. Airline
fares declined for the second consecutive month following a sharp increase
in June.
The index for apparel declined for the fifth consecutive month--down
0.6 percent in August. (Prior to seasonal adjustment, apparel prices were
unchanged as price increases associated with the introduction of fall-
winter wear were offset by seasonal price discounting on spring-summer
wear.)
Medical care costs rose 0.5 percent in August to a level 4.5 percent
higher than a year ago. In August, the index for medical care commodities-
-prescription drugs, nonprescription drugs, and medical supplies--
increased 0.3 percent. The index for medical care services rose 0.6
percent in August. Charges for professional services and for hospital and
related services increased 0.5 and 0.7 percent, respectively.
The index for recreation increased 0.2 percent in August, the same as
in July. Increases in the August indexes for admissions to movies,
theaters, concerts, and sporting events and for pets, pet products and
services
--up 0.8 and 0.9 percent--more than offset declines in the indexes for
video and audio, for photography, and for toys.
The index for education and communication increased 0.5 percent in
August, the same as in each of the preceding two months. In August,
educational costs rose 0.9 percent, while the index for communication
declined 0.1 percent. Within the former group, the indexes for college
tuition and fees and for elementary and high school tuition and fees
increased 1.7 and 1.3 percent, respectively. (Prior to seasonal
adjustment, these indexes rose 2.7 and 3.7 percent, respectively.)
The index for other goods and services, which rose 1.6 percent in
July, fell 0.9 percent in August. The index for tobacco and smoking
products--down 3.8 percent in August after increasing 4.8 percent in July-
-was responsible for both the July increase and the August decline in this
major group.
CPI for Urban Wage Earners and Clerical Workers (CPI-W)
On a seasonally adjusted basis, the CPI for Urban Wage Earners
and Clerical Workers was unchanged in August.
Table B. Percent changes in CPI for Urban Wage Earners and Clerical
Workers (CPI-W)
Seasonally adjusted Un-
Compound adjusted
Expenditure Changes from preceding month annual rate 12-mos.
Category 2001 3-mos. ended ended
Feb. Mar. Apr. May June July Aug. Aug. '01 Aug. '01
All Items .3 .0 .4 .3 .2 -.3 .0 -.7 2.7
Food and beverages .5 .2 .2 .2 .4 .3 .2 3.8 3.1
Housing .1 .2 .1 .4 .3 .1 .1 2.1 4.1
Apparel .9 .5 -1.2 -.9 -.3 -.6 -.5 -5.6 -1.9
Transportation .4 -.9 1.0 1.3 -.5 -2.5 -.3 -12.8 .1
Medical care .5 .4 .3 .3 .3 .2 .6 4.2 4.5
Recreation -.1 .0 .8 -.1 -.2 .3 .1 .8 1.0
Education and
communication .1 .5 .0 .1 .5 .5 .4 5.5 2.7
Other goods and
Services .6 .1 1.7 -.5 .4 2.1 -1.3 4.5 4.8
Special Indexes
Energy -.2 -2.3 2.3 3.4 -1.3 -6.2 -1.6 -31.1 2.3
Food .5 .2 .2 .2 .4 .3 .2 3.8 3.2
All Items less
food and energy .3 .2 .2 .1 .3 .3 .1 2.7 2.6
Consumer Price Index data for September are scheduled for release on
Friday, October 19, 2001, at 8:30 A.M. (EDT).
___________________________________________________________________________
Planned Changes in the Consumer Price Index in 2002
Expenditure Weight Update
As announced in December 1998, the Bureau of Labor Statistics (BLS)
will update the consumption expenditure weights in the Consumer Price
Index for all Urban Consumers (CPI-U) and in the Consumer Price Index for
Urban Wage Earners and Clerical Workers (CPI-W) to the 1999-2000 period,
effective with release of data for January 2002. The newer weights will
replace the 1993-95 weights, which were first used in the index effective
with January 1998 data. Additionally, CPI expenditure weights will be
updated at two-year intervals subsequent to the 2002 updating. Thus, for
example, CPI expenditure weights will be updated to the 2001-02 period
effective with release of CPI data for January 2004.
Historically, the introduction of a comprehensive new set of
expenditure weights attached to the categories of goods and services in
the CPI "market basket" has taken place in the context of the periodic
major revisions of the index. Such major revisions have taken place
approximately once each decade-in 1940, 1953, 1964, 1978, 1987 and, most
recently, in 1998.
The goal in employing more current expenditure weights is to have the
CPI reflect, as much as possible, the inflation currently experienced by
consumers. More specifically, the use of more current weights will help
to ensure that the relative importance of CPI item categories, such as
food away from home, college tuition, or medical care services, more
accurately reflects how consumers are allocating their spending.
Publication of Overlap CPIs
For the first six months of 2002, BLS will continue to calculate and
publish selected CPI-U and CPI-W "overlap" indexes on a not seasonally
adjusted basis. These indexes will be compiled using the 1993-95
expenditure pattern that was introduced into the CPI in 1998. Comparison
of these index series to the corresponding updated series will enable
users of the CPI to observe the effects of the expenditure weight change.
The subsequent expenditure updates scheduled in 2004 and every two years
thereafter also will be accompanied by the publication of overlap indexes
for a six-month period using the previous expenditure pattern.
Publication of CPI for the Phoenix Area
Effective with release of the July 2002 Consumer Price Index (CPI),
BLS will initiate publication of consumer price data specific to the
Phoenix-Mesa, Arizona, Metropolitan Statistical Area. As with the
national CPI and other local area CPIs, data will be published for each of
two population groups, that for all urban consumers (CPI-U) and that for
urban wage earners and clerical workers (CPI-W). The Phoenix-Mesa CPI
will be published on a semi-annual basis with a reference base of December
2001 = 100. The same amount of item detail will be available for Phoenix-
Mesa as is presently available for all other areas published on a semi-
annual basis.
Change to Published Item Structure
Effective with release of the January 2002 CPI, BLS will begin
publishing an item index for leased cars and trucks. This index series
will be available monthly at the U.S. City Average area level for both the
CPI-U and CPI-W with a December 2001 = 100 reference base.
___________________________________________________________________________
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. For a recorded
message of Summary CPI data, call (202) 691-5200.
___________________________________________________________________________
Brief Explanation of the CPI
The Consumer Price Index (CPI) is a measure of the average
change in prices over time in a 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 87 percent of the total population and
(2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W)
which covers 32 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 other goods and services that people buy for
day-to-day living. Prices are collected in 87 urban areas across
the country from about 50,000 housing units and approximately
23,000 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. Prices of fuels and a
few other items are obtained every month in all 87 locations.
Prices of most other commodities and services are collected every
month in the three largest geographic areas and every other month
in other areas. Prices of most goods and services are obtained by
personal visits or telephone calls of the Bureau's trained
representatives.
In calculating the index, price changes for the various items
in each location are averaged together with weights, which
represent their importance in the spending of the appropriate
population group. Local data are then combined to obtain a U.S.
city average. Separate indexes are also published by size of
city, by region of the country, for cross-classifications of
regions and population-size classes, and for 26 local areas. Area
indexes do not measure differences in the level of prices among
cities, they only measure the average change in prices for each
area since the base period.
The index measures price change from a designed reference
date-1982-84 which 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 visit the CPI home page on the Internet
at http://www.bls.gov/cpihome.htm or contact our CPI Information
and Analysis Section on (202) 691-7000.
___________________________________________________________________________
Calculating Index Changes
Movements of the indexes from one month to another are
usually expressed as percent changes rather than changes in index
points, because index point changes are affected by the level of
the index in relation to its base period while percent changes are
not. The example below illustrates the computation of index point
and percent changes.
Percent changes for 3-month and 6-month periods are expressed
as annual rates and are computed according to the standard formula
for compound growth rates. These data indicate what the percent
change would be if the current rate were maintained for a 12-month
period.
Index Point Change
CPI 115.7
Less previous index 111.2
Equals index point change 4.5
Percent Change
Index point difference 4.5
Divided by the previous index 111.2
Equals 0.040
Results multiplied by one hundred 0.040 x 100
Equals percent change 4.0
___________________________________________________________________________
Regions Defined
The states in the four regions shown in Tables 3 and 6 are listed below.
The Northeast--Connecticut, Maine, Massachusetts, New Hampshire, New York,
New Jersey, Pennsylvania, Rhode Island, and Vermont.
The Midwest--Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota,
Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.
The South--Alabama, Arkansas, Delaware, Florida, Georgia, Kentucky,
Louisiana, Maryland, Mississippi, North Carolina, Oklahoma, South
Carolina, Tennessee, Texas, Virginia, West Virginia, and the District of
Columbia.
The West--Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana,
Nevada, New Mexico, Oregon, Utah, Washington, and Wyoming.
___________________________________________________________________________
A Note on Seasonally Adjusted and Unadjusted Data
Because price data are used for different purposes by
different groups, the Bureau of Labor Statistics publishes
seasonally adjusted as well as unadjusted changes each month.
For analyzing general 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.
The unadjusted data are of primary interest to consumers
concerned about the prices they actually pay. Unadjusted data
also are used extensively for escalation purposes. Many
collective bargaining contract agreements and pension plans, for
example, tie compensation changes to the Consumer Price Index
unadjusted for seasonal variation.
Seasonal factors used in computing the seasonally adjusted
indexes are derived by the X-12-ARIMA Seasonal Adjustment Method.
The updated seasonal data at the end of 1977 replaced data from
1967 through 1977. Subsequent annual updates have replaced 5
years of seasonal data, e.g., data from 1996 through 2000 were
replaced at the end of 2000. The seasonal movement of all items
and 54 other aggregations is derived by combining the seasonal
movement of 73 selected components. Each year the seasonal status
of every series is reevaluated based upon certain statistical
criteria. If any of the 73 components change their seasonal
adjustment status from seasonally adjusted to not seasonally
adjusted, not seasonally adjusted data will be used for the last 5
years, but the seasonally adjusted indexes will be used before
that period. Note: 38 of the 73 components are seasonally
adjusted for 2001.
Seasonally adjusted data, including the All items index levels,
are subject to revision for up to five years after their original
release. For this reason, BLS advises against the use of these
data in escalation agreements.
Effective with the calculation of the seasonal factors for
1990, the Bureau of Labor Statistics has used an enhanced seasonal
adjustment procedure called Intervention Analysis Seasonal
Adjustment for some CPI series. Intervention Analysis Seasonal
Adjustment allows for better estimates of seasonally adjusted
data. Extreme values and/or sharp movements which might distort
the seasonal pattern are estimated and removed from the data prior
to calculation of seasonal factors. Beginning with the
calculation of seasonal factors for 1996, X-12-ARIMA software was
used for Intervention Analysis Seasonal Adjustment.
For the fuel oil, natural gas, motor fuels, and educational
books and supplies indexes, this procedure was used to offset the
effects that extreme price volatility would otherwise have had on
the estimates of seasonally adjusted data for those series. For
the Nonalcoholic beverages index, the procedure was used to offset
the effects of a large increase in coffee prices due to adverse
weather. The procedure was used to account for unusual butter fat
supply reductions affecting the Fats and oils series. For the
Water and sewerage maintenance index, the procedure was used to
account for a data collection anomaly.
A description of Intervention Analysis Seasonal Adjustment,
as well as a list of unusual events modeled and seasonal factors
for these items may be obtained by writing the Bureau of Labor
Statistics, Division of Consumer Prices and Price Indexes,
Washington, DC 20212 or by calling Daniel Chow on (202) 691-6968
or sending e-mail to Chow_Dan@BLS.GOV. If you have general
questions about the CPI, please call our information staff at
(202) 691-7000.
Bureau of Labor Statistics
mailto:gibson_s@bls.gov
Last modified:
Tuesday, September 18, 2001
URL: /news.release/cpi.nr0.htm
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Consumer Price Index