Consumer Price Index Summary
FOR TECHNICAL INFORMATION: Stephen B. Reed (202) 691-7000 USDL-08-1144 CPI QUICKLINE: (202) 691-6994 TRANSMISSION OF FOR CURRENT AND HISTORICAL MATERIAL IN THIS INFORMATION: (202) 691-5200 RELEASE IS EMBARGOED MEDIA CONTACT: (202) 691-5902 UNTIL 8:30 A.M. (EDT) INTERNET ADDRESS: http://www.bls.gov/cpi/ Thursday, August 14,2008 CONSUMER PRICE INDEX: JULY 2008 The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in July, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The July level of 219.964 (1982-84=100) was 5.6 percent higher than in July 2007. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.5 percent in July, prior to seasonal adjustment. The July level of 216.304 (1982-84=100) was 6.2 percent higher than in July 2007. The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.4 percent in July on a not seasonally adjusted basis. The July level of 126.116 (December 1999=100) was 4.8 percent higher than in July 2007. Please note that the indexes for the post-2006 period are subject to revision. CPI for All Urban Consumers (CPI-U) On a seasonally adjusted basis, the CPI-U advanced 0.8 percent in July, following a 1.1 percent increase in June. The index for energy rose sharply for the third straight month, increasing 4.0 percent in July and accounting for about half of the overall increase in the all items index. The food index rose 0.9 percent in July after rising 0.8 percent in June. The index for food at home rose 1.2 percent in July after rising 1.0 percent in June. Indexes for five of the six major grocery store food groups rose at least 1.0 percent. The index for all items less food and energy increased 0.3 percent in July, the second straight such increase. The indexes for apparel and for recreation increased more sharply than in June, but the indexes for shelter and medical care rose more slowly. Table A. Percent changes in CPI for All Urban Consumers (CPI-U) Seasonally adjusted Expenditure Compound Category Changes from preceding month annual Un- rate adjusted 3-mos. 12-mos. Jan. Feb. Mar. Apr. May June July ended ended 2008 2008 2008 2008 2008 2008 2008 July 2008 July 2008 All items.......... .4 .0 .3 .2 .6 1.1 .8 10.6 5.6 Food and beverages .7 .4 .2 .9 .3 .7 .9 8.0 5.8 Housing........... .2 .2 .4 .3 .5 .5 .6 6.5 3.9 Apparel........... .4 -.3 -1.3 .5 -.3 .1 1.2 4.2 .8 Transportation.... .5 -.7 .7 -.7 2.0 3.8 1.7 34.3 13.4 Medical care...... .5 .1 .1 .2 .2 .2 .1 1.8 3.5 Recreation........ .2 .1 .3 -.1 .1 .1 .4 2.4 1.7 Education and communication.. .4 .1 .3 .4 .4 .5 .5 5.5 3.7 Other goods and services....... .4 .2 .4 .5 .4 .4 .4 4.6 4.0 Special indexes: Energy............ .7 -.5 1.9 .0 4.4 6.6 4.0 79.4 29.3 Food.............. .7 .4 .2 .9 .3 .8 .9 8.4 6.0 All items less food and energy .3 .0 .2 .1 .2 .3 .3 3.5 2.5 During the first seven months of 2008, the CPI-U rose at a 6.2 percent seasonally adjusted annualized rate (SAAR). This compares with a 4.1 percent increase for the 12 months ending December 2007. The energy index rose at a 33.1 percent SAAR in the first seven months of 2008 after increasing 17.4 percent in 2007. Gasoline prices increased at a 35.2 percent SAAR in 2008 after a 29.6 percent increase in 2007, while natural gas prices rose at a 71.3 percent SAAR after decreasing 0.4 percent in 2007. The food index has increased at a 7.6 SAAR for the first seven months of 2008 after increasing 4.9 percent in 2007. Excluding food and energy, the CPI-U has advanced at a 2.5 percent SAAR following a 2.4 percent increase in 2007. The food and beverages index rose 0.9 percent in July. The index for food at home increased 1.2 percent, following a 1.0 percent rise in June. Five of the six major grocery store food group indexes increased at least 1.0 percent in July. The index for cereal and bakery products increased 1.8 percent in July and is 12.1 percent higher than in July 2007, while the fruits and vegetables index rose 1.2 percent in July and is 10.1 percent higher than a year ago. Within the fruits and vegetables group, the fresh fruits index was virtually unchanged in July, while the index for fresh vegetables rose 2.9 percent. The index for meats, poultry, fish, and eggs rose 1.0 percent in July after a 0.8 percent increase in June. The index for dairy and related products increased 1.6 percent in July, with the index for milk increasing 4.3 percent. The index for other food at home rose 1.0 percent in July after a 0.4 percent increase in June. The index for nonalcoholic beverages and beverage materials increased 0.7 percent in July. The other two components of the food and beverages index-food away from home and alcoholic beverages-increased 0.6 and 0.4 percent respectively. The index for housing rose 0.6 percent in July after increasing 0.5 percent the previous month. The index for shelter increased 0.2 percent after a 0.3 percent increase in June. Within shelter, the indexes for rent and owners' equivalent rent increased 0.3 and 0.1 percent, respectively, while the index for lodging away from home increased 0.7 percent for the second straight month. The index for household energy rose 3.8 percent in July to a level 18.2 percent higher than in July 2007. The index for natural gas increased 7.4 percent in July. It was the sixth straight large increase and the index is up 32.7 percent since July 2007. The index for electricity increased 2.5 percent in July after declining 0.1 percent in June. The index for household furnishings and operations increased 0.4 percent in July after being virtually unchanged in June. The transportation index advanced 1.7 percent in July, the third straight substantial increase. The index for gasoline increased 4.1 percent and accounted for over 80 percent of the increase in this group. (Prior to seasonal adjustment, gasoline prices increased 0.7 percent over their previous peak in June and are 37.9 percent higher than in July 2007.) The index for new vehicles increased 0.2 percent in July while the index for used cars and trucks declined 0.1 percent. During the last 12 months, new vehicle prices have declined 0.8 percent and prices for used cars and trucks have fallen 0.1 percent. The index for public transportation increased 1.1 percent in July, mostly due to a 1.3 percent increase in the index for airline fares. (Prior to seasonal adjustment, airline fares increased 2.1 percent in July and are 19.9 percent higher than in July 2007.) The index for apparel rose 1.2 percent in July following a 0.1 percent increase in June. (Prior to seasonal adjustment, apparel prices declined 2.3 percent in July.) Apparel prices have increased 0.8 percent since July 2007. Medical care prices rose 0.1 percent in July after rising 0.2 percent in June and are 3.5 percent higher than a year ago. The index for medical care commodities--prescription drugs, nonprescription drugs, and medical supplies-decreased 0.2 percent in July after a 0.1 percent increase in June. The index for medical care services increased 0.2 percent in July. The indexes for professional services and for hospital and related services increased 0.2 percent and 0.3 percent, respectively. The index for recreation increased 0.4 percent in July, following a 0.1 percent increase in June. Increases in the indexes for pets and pet products and services, for sporting goods, and for admissions, more than offset declines in the indexes for photography and for toys. The index for video and audio was virtually unchanged in July. The index for education and communication increased 0.5 percent in July, with both the education and communication components increasing 0.5 percent. Within the latter category, the indexes for information and information processing increased 0.6 percent, reflecting a 0.7 percent increase in the index for telephone services. The index for information technology, hardware and services rose 0.2 percent in July after declining for four months in a row. The index for other goods and services increased 0.4 percent in July, the third consecutive such increase. The index for tobacco and smoking products rose 1.2 percent and the index for personal care increased 0.1 percent. CPI for Urban Wage Earners and Clerical Workers (CPI-W) On a seasonally adjusted basis, the CPI for Urban Wage Earners and Clerical Workers increased 0.9 percent in July. Table B. Percent changes in CPI for Urban Wage Earners and Clerical Workers (CPI-W) Seasonally adjusted Expenditure Compound Category Changes from preceding month annual Un- rate adjusted 3-mos. 12-mos. Jan. Feb. Mar. Apr. May June July ended ended 2008 2008 2008 2008 2008 2008 2008 July 2008 July 2008 All items.......... .4 .0 .4 .2 .7 1.2 .9 11.9 6.2 Food and beverages .7 .3 .2 .9 .3 .8 .9 8.2 5.8 Housing........... .2 .2 .5 .4 .5 .5 .7 6.9 4.3 Apparel........... .8 -.3 -1.2 .2 -.2 .0 .8 2.7 .7 Transportation.... .7 -.7 .7 -.7 2.1 4.0 1.8 36.7 14.4 Medical care...... .6 .1 .1 .2 .1 .2 .1 1.7 3.6 Recreation........ .2 .1 .3 -.2 .0 .2 .4 2.4 1.7 Education and communication.. .3 .1 .2 .4 .3 .5 .5 5.6 3.3 Other goods and services....... .5 .3 .4 .4 .5 .6 .5 6.4 4.6 Special indexes: Energy............ .8 -.7 1.9 -.2 4.5 6.8 4.0 81.3 29.7 Food.............. .7 .3 .2 1.0 .3 .8 .9 8.6 6.0 All items less food and energy .3 .0 .1 .1 .2 .3 .3 3.2 2.5 Consumer Price Index data for August are scheduled for release on Tuesday, September 16, 2008, at 8:30 A.M. (EDT). 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. Brief Explanation of the CPI The Consumer Price Index (CPI) is a measure of the average change in prices over time of goods and services purchased by households. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) the CPI for Urban Wage Earners and Clerical Workers (CPI-W), which covers households of wage earners and clerical workers that comprise approximately 32 percent of the total population and (2) the CPI for All Urban Consumers (CPI-U) and the Chained CPI for All Urban Consumers (C-CPI- U), which cover approximately 87 percent of the total population and include in addition to wage earners and clerical worker households, 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 CPIs are 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. For the CPI-U and CPI-W 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 27 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. For the C-CPI-U data are issued only at the national level. It is important to note that the CPI-U and CPI-W are considered final when released, but the C-CPI-U is issued in preliminary form and subject to two annual revisions. The index measures price change from a designed reference date. For the CPI-U and the CPI-W the reference base is 1982-84 equals 100.0. The reference base for the C-CPI-U is December 1999 equals 100. An increase of 16.5 percent from the reference base, 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/cpi/ or contact our CPI Information and Analysis Section on (202) 691-7000. Note on Sampling Error in the Consumer Price Index The CPI is a statistical estimate that is subject to sampling error because it is based upon a sample of retail prices and not the complete universe of all prices. BLS calculates and publishes estimates of the 1- month, 2-month, 6-month and 12-month percent change standard errors annually, for the CPI-U. These standard error estimates can be used to construct confidence intervals for hypothesis testing. For example, the estimated standard error of the 1 month percent change is 0.06 percent for the U.S. All Items Consumer Price Index. This means that if we repeatedly sample from the universe of all retail prices using the same methodology, and estimate a percentage change for each sample, then 95% of these estimates would be within 0.12 percent of the 1 month percentage change based on all retail prices. For a 1-month change of 0.2 percent in the All Items CPI for All Urban Consumers, we are 95 percent confident that the actual percent change based on all retail prices would fall between 0.08 and 0.32 percent. For the latest data, including information on how to use the estimates of standard error, see "Variance Estimates for Changes in the Consumer Price Index, January 2005- December 2005" in the CPI Detailed Report, February 2006. These data are available on the CPI home page (http://www.bls.gov/cpi), using the following link http://www.bls.gov/cpi/cpivar2006.pdf 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 202.416 Less previous index 201.800 Equals index point change .616 Percent Change Index point difference .616 Divided by the previous index 201.800 Equals 0.003 Results multiplied by one hundred 0.003x100 Equals percent change 0.3 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 before adjustment for seasonal variation. Seasonal factors used in computing the seasonally adjusted indexes are derived by the X-12-ARIMA Seasonal Adjustment Method. Seasonally adjusted indexes and seasonal factors are computed annually. Each year, the last 5 years of seasonally adjusted data are revised. Data from January 2003 through December 2007 were replaced in January 2008. Exceptions to the usual revision schedule were: the updated seasonal data at the end of 1977 replaced data from 1967 through 1977; and, in January 2002, dependently seasonally adjusted series were revised for January 1987- December 2001 as a result of a change in the aggregation weights for dependently adjusted series. For further information, please see "Aggregation of Dependently Adjusted Seasonally Adjusted Series," in the October 2001 issue of the CPI Detailed Report. 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 in the aggregation of the dependent series for the last 5 years, but the seasonally adjusted indexes will be used before that period. Note: 48 of the 73 components are seasonally adjusted for 2008. 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 seasonal factors introduced in January 2008, BLS adjusted 20 series using Intervention Analysis Seasonal Adjustment, including selected food and beverage items, motor fuels, electricity and vehicles. For example, this procedure was used for the Motor fuel series to offset the effects of events such as damage to oil refineries from Hurricane Katrina. For a complete list of Intervention Analysis Seasonal Adjustment series and explanations, please refer to the article "Intervention Analysis Seasonal Adjustment," located on our website at http://www.bls.gov/cpi/cpisapage.htm. For additional information on seasonal adjustment in the CPI, please write to the Bureau of Labor Statistics, Division of Consumer Prices and Price Indexes, Washington, DC 20212 or contact Jeff Wilson at (202) 691- 6968, or by e-mail at Wilson.Jeff@bls.gov. If you have general questions about the CPI, please call our information staff at (202) 691-7000. .
- Table 1. Consumer Price Index for All Urban Consumers (CPI-U): U. S. City Average, by expenditure category and commodity and service group
- Table 2. Consumer Price Index for All Urban Consumers (CPI-U): Seasonally adjusted U. S. City Average, by expenditure category and commodity and service group
- Table 3. Consumer Price Index for All Urban Consumers (CPI-U): Selected areas, all items index
- Table 4. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): U. S. City Average, by expenditure category and commodity and service group
- Table 5. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): Seasonally adjusted U. S. City Average, by expenditure category and commodity and service group
- Table 6. Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W): Selected areas, all items index
- Table 7. Chained Consumer Price Index for All Urban Consumers (C-CPI-U): U.S. city average, by expenditure category and commodity and service group
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Last Modified Date: August 14, 2008