Washington-Baltimore Area Consumer Price Index: JULY 2009 (PDF)

Retail prices in the Washington-Baltimore area, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), rose 1.1 percent from May to July, following a 0.5-percent increase in the previous two-month period, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.  Sheila Watkins, the Bureau’s regional commissioner, noted that the recent advance was led by increases in the transportation and housing indexes.  Prices for recreation, medical care, and education and communication also rose, but these advances were more than offset by declines in the remaining three categories, particularly apparel.  (See chart A.)  The July level of 140.810 (November 1996 = 100) was 0.9 percent lower than in July 2008—the largest 12-month decrease since publication began in November 1996.  Over the same period, the core inflation rate, as measured by the all items less food and energy index, rose 2.0 percent.  (See table 1.)

Chart A.  2-month and 12-month percent changes ended July 2009 for the major categories of the CPI-U for the Washington-Baltimore area, not seasonally adjusted

Chart Data

The transportation index advanced 5.8 percent from May to July due largely to higher prices for gasoline, which increased for the third consecutive bimonthly period, up 44.7 percent since January and 15.5 percent since May.  Over the year, gasoline prices were 36.9 percent lower due to steep declines in the second half of last year.  Higher prices for airline fare also contributed to the two-month increase in the transportation index. Since July 2008, the transportation index fell 14.2 percent.

The housing index rose 1.0 percent since May led by higher prices for fuels and utilities, which rose 6.6 percent following five consecutive bimonthly periods of decline totaling 13.3 percent.  The recent advance in fuels and utilities prices reflected a 9.1-percent seasonal increase in electricity prices, which typically rise in June as summer rate schedules are introduced, then decline in October.  The recent rise in electricity prices was the smallest May-July increase since the inception of this index in December 1997.  Over the year, electricity prices advanced 4.8 percent.  Utility (piped) gas service prices edged up 0.2 percent since May but dropped 41.4 percent over the year—the largest 12-month decrease since publication began in December 1997.  Overall, fuels and utilities prices were 7.6 percent below year-ago levels.  Shelter prices rose 0.5 percent since May as prices for both published components, owners’ equivalent rent of primary residence (0.5 percent) and rent of primary residence (0.7 percent), increased over the last two months; each component also rose over the year—up 3.6 and 5.1 percent, respectively.  Since July 2008, the shelter index advanced 2.1 percent.  Prices for household furnishings and operations, the third component of the housing index, fell 1.4 percent since May but were 2.3 percent higher than last year.  Over the last 12 months, the housing index increased 1.0 percent.

The recreation index advanced for the first time since January, up 1.2 percent from May to July.  The recent two-month increase was the largest in three years.  Since July 2008, the recreation index declined 1.8 percent.

The medical care index edged up 0.2 percent over the last two months, due almost entirely to higher prices for dental services.  Medical care prices rose 1.2 percent over the year.

Education and communication prices were nearly unchanged, up 0.1 percent since May.  Over the last 12 months, the education and communication index rose 3.1 percent.  This index has experienced uninterrupted over-the-year increases stretching back to September 2004.

The remaining indexes had lower prices from May to July.  Following normal seasonal patterns, apparel prices fell 4.2 percent.  The recent decline was dominated by lower prices for women’s suits and separates.  Over the year, apparel prices rose 4.5 percent.

The other goods and services index (which includes tobacco and smoking products, personal care products, personal care services, and miscellaneous personal services such as legal, funeral, and laundry and dry cleaning services) fell 0.6 percent over the last two months.  The recent decline followed five straight bimonthly increases totaling 11.3 percent, which pushed the other goods and services index to a level 10.6 percent higher than a year ago.

The food and beverages index was little changed, down 0.1 percent from May to July.  Food at home prices fell 0.3 percent over the last two months but inched up 0.1 percent over the year.  Prices for food away from home edged down 0.2 percent since May—the first two-month decline since September 2003.  Over the year, prices for food away from home advanced 2.2 percent.  Nearly offsetting those two-month decreases, prices for alcoholic beverages rose 2.2 percent from May to July.  Alcoholic beverages prices were also 2.2 percent higher than a year ago.  The overall food and beverages index rose 1.2 percent over the year.

The energy index, which reflects prices for gasoline and household fuels, advanced 10.7 percent as prices rose for both gasoline (15.5 percent) and electricity (9.1 percent) over the last two months.  Since July 2008, energy prices dropped 23.7 percent—their largest decrease since publication began in November 1996. 

Nearly three-quarters of the two-month increase in the overall local index came from rising services prices, up 1.2 percent since May and 1.4 percent since last July.  The commodities index increased 0.9 percent over the last two months but fell 5.1 percent over the year.

The CPI-U for the Washington-Baltimore area stood at 140.810 on the November 1996=100 reference base, which means that a market basket of goods and services that averaged $100.00 in November 1996 would have cost $140.81 in July. 

The Washington-Baltimore, D.C.-Md.-Va.-W.Va., Consolidated Metropolitan Statistical Area (CMSA) includes the District of Columbia; Baltimore City and the counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Frederick, Harford, Howard, Montgomery, Prince George’s, Queen Anne’s, and Washington in Maryland; the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park and the counties of Arlington, Clarke, Fairfax, Fauquier, King George, Loudoun, Prince William, Rappahannock, Spotsylvania, Stafford, and Warren in Virginia; and the counties of Berkeley and Jefferson in West Virginia.

The relative importance of a component of the CPI is its expenditure or value weight expressed as a percentage of all items within an area.  Relative importance ratios show approximately how the index population distributes expenditures when the value weights are collected and represent an estimate of how consumers would distribute their expenditures as prices change over time.  Relative importance ratios cannot be used as estimates of current spending patterns or as indicators of changing consumer expenditures in the intervals between weight revisions because consumption patterns are influenced by factors—including income, variations in climate, family size, and availability of new and different kinds of goods and services—other than price change. (See table A.)