Transmission of material in this release is embargoed until
8:30 a.m. (EST) Wednesday, November 18, 2009 USDL-09-1401
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Consumer Price Index - October 2009
On a seasonally adjusted basis, the Consumer Price Index for All
Urban Consumers (CPI-U) rose 0.3 percent in October, the U.S. Bureau
of Labor Statistics reported today. The index has decreased 0.2
percent over the last 12 months on a not seasonally adjusted basis.
The seasonally adjusted all items increase largely reflected advances
in the indexes for energy and for new and used motor vehicles. The
energy index rose for the fifth time in the last six months,
advancing 1.5 percent as the indexes for gasoline, fuel oil, natural
gas, and electricity all increased. The index for all items less food
and energy rose 0.2 percent in October, the same increase as in
September. The indexes for used cars and trucks and for new vehicles
both rose sharply and together they accounted for over 90 percent of
the increase in the index for all items less food and energy. The
indexes for airline fares and medical care also increased, while the
shelter index was unchanged and the indexes for apparel and
recreation declined.
The food index also increased in October, rising 0.1 percent after
declining in two of the previous three months. The index for food
away from home increased slightly, while the food at home index was
unchanged. Within the food at home group, the index for dairy and
related products rose significantly, while the fruits and vegetables
index declined for the fourth straight month.
Table A. Percent changes in CPI for All Urban Consumers (CPI-U): U.S. city
average
Seasonally adjusted changes from
preceding month
Un-
adjusted
12-mos.
Apr. May June July Aug. Sep. Oct. ended
2009 2009 2009 2009 2009 2009 2009 Oct.
2009
All items.................. .0 .1 .7 .0 .4 .2 .3 -.2
Food...................... -.2 -.2 .0 -.3 .1 -.1 .1 -.6
Food at home............. -.6 -.5 .0 -.5 .0 -.3 .0 -2.8
Food away from home (1).. .3 .1 .1 .1 .1 .1 .1 2.2
Energy.................... -2.4 .2 7.4 -.4 4.6 .6 1.5 -14.0
Energy commodities....... -2.6 2.3 16.2 -.4 8.5 1.1 1.9 -18.7
Gasoline (all types).... -2.8 3.1 17.3 -.8 9.1 1.0 1.6 -17.9
Fuel oil................ -.3 -3.3 4.8 -1.5 6.2 1.5 6.3 -26.3
Energy services.......... -2.2 -1.7 -1.2 -.3 .0 .1 .9 -7.1
Electricity............. -.6 -.4 -1.9 -.6 -.1 .6 .6 -.6
Utility (piped) gas
service.............. -7.0 -5.7 1.3 .9 .4 -1.7 1.9 -24.0
All items less food and
energy................. .3 .1 .2 .1 .1 .2 .2 1.7
Commodities less food and
energy commodities.... .5 .2 .3 .2 -.3 .3 .4 2.3
New vehicles............ .4 .5 .7 .5 -1.3 .4 1.6 3.8
Used cars and trucks.... -.1 1.0 .9 .0 1.9 1.6 3.4 2.3
Apparel................. -.2 -.2 .7 .6 -.1 .1 -.4 1.4
Medical care commodities .3 .4 .1 -.1 .5 .6 .2 4.3
Services less energy
services.............. .2 .1 .1 .0 .2 .1 .1 1.5
Shelter................. .2 .1 .1 -.2 .1 .0 .0 .7
Transportation services .3 -.1 -.1 .5 .6 .7 .4 2.7
Medical care services... .4 .3 .2 .3 .2 .4 .2 3.2
1 Not seasonally adjusted.
Consumer Price Index Data for October 2009
Food
The food index rose 0.1 percent in October after declining 0.1
percent in September. The index for food away from home increased 0.1
percent while the food at home index was unchanged. Within the food
at home group, the index for dairy and related products rose 1.0
percent in October after a 0.5 percent increase in September, and the
index for other food at home advanced 0.3 percent. These increases
were offset by a 0.7 percent decline in the fruits and vegetables
index and 0.2 percent decreases in the indexes for meats, poultry,
fish, and eggs and for nonalcoholic beverages. The index for cereals
and bakery products was unchanged in October. Over the past 12
months, the food index has declined 0.6 percent with the food at home
index down 2.8 percent.
Energy
The energy index rose 1.5 percent in October after increasing 0.6
percent in September. The index for energy commodities rose 1.9
percent, with the gasoline index increasing 1.6 percent. (Before
seasonal adjustment, gasoline prices fell 0.8 percent in October.)
The index for fuel oil rose 6.3 percent. The index for energy
services, which increased 0.1 percent in September, rose 0.9 percent
in October. The electricity index increased 0.6 percent while the
index for natural gas rose 1.9 percent in October after declining 1.7
percent in September. Over the past 12 months, the energy index has
fallen 14.0 percent with the gasoline index declining 17.9 percent.
All items less food and energy
The index for all items less food and energy rose 0.2 percent in
October, the same increase as in September. Most of the advance was
due to increases in transportation indexes. The new vehicles index
rose 1.6 percent and the index for used cars and trucks rose 3.4
percent, its third consecutive substantial increase. The index for
airline fares rose for the fourth straight month, increasing 1.7
percent in October. Outside of the transportation group, the changes
within all items less food and energy were largely modest. The
medical care index rose 0.2 percent in October after increasing 0.4
percent in September. The shelter index was unchanged in October, as
it was in September. The rent index decreased 0.1 percent, the index
for owners' equivalent rent was unchanged, and the index for lodging
away from home rose 0.4 percent. Posting declines in October were the
indexes for recreation and apparel, which both fell 0.4 percent. For
the past 12 months, the index for all items less food and energy has
risen 1.7 percent.
Not seasonally adjusted CPI measures
The Consumer Price Index for All Urban Consumers (CPI-U) decreased
0.2 percent over the last 12 months to an index level of 216.177
(1982-84=100). For the month, the index increased 0.1 percent prior
to seasonal adjustment.
The Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) decreased 0.3 percent over the last 12 months to an index
level of 211.549 (1982-84=100). For the month, the index increased
0.1 percent prior to seasonal adjustment.
The Chained Consumer Price Index for All Urban Consumers (C-CPI-U)
decreased 0.5 percent over the last 12 months. For the month, the
index increased 0.1 percent on a not seasonally adjusted basis.
Please note that the indexes for the post-2007 period are subject to
revision.
The Consumer Price Index for November 2009 is scheduled to be
released on Wednesday, December 16, 2009, at 8:30 a.m. (EST).
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 0.04 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 0.08 percent of the 1 month percentage change based on all
retail prices. For example, 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 0.12 and 0.28 percent. For the latest data, including
information on how to use the estimates of standard error, see
"Variance Estimates for Price Changes in the Consumer Price Index,
January-December 2008". These data are available on the CPI home page
(http://www.bls.gov/cpi), or by using the following link
http://www.bls.gov/cpi/cpivar2008.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 2004 through December 2008 were replaced in January 2009.
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: 47
of the 73 components are seasonally adjusted for 2009.
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 2009, BLS adjusted 29
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.
