PHILADELPHIA AREA CONSUMER PRICE INDEX: JUNE 2009 (PDF)

Largest 12-Month Decrease in Over 59 Years

Retail prices in the Philadelphia area, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), rose 1.0 percent from April to June following a 0.6-percent increase in the previous two-month period, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.  The recent advance reflected higher prices for transportation and housing, while lower prices for apparel, food and beverages, and recreation helped to moderate the increase in the overall CPI.  Prices for medical care were unchanged since April.  (See chart A.)  Sheila Watkins, the Bureau's regional commissioner, noted that despite three consecutive two-month advances, June’s 12-month decrease of 2.0 percent was the largest over-the-year decline in the local CPI since an identical decline in January 1950.  Over the last 12 months, the core inflation rate, as measured by the all items less food and energy index, rose 1.1 percent.  (See table 1.)

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

chart data

The transportation index rose 7.6 percent over the last two months due almost entirely to higher private transportation prices, in particular gasoline and new and used motor vehicles.  Gasoline prices advanced for the third consecutive bimonthly period, up 42.4 percent since December and 26.4 percent since April.  Due to strong decreases in the second half of 2008, gasoline prices were 35.8 percent lower than their year-ago levels.  Over the last 12 months, transportation prices fell 13.1 percent.

The housing index increased 0.9 percent from April to June led by higher prices for fuels and utilities.  The fuels and utilities index rose 3.2 percent since April dominated by a 7.7-percent seasonal increase in electricity prices, which normally rise in June as summer rate schedules are introduced, then decline in October.  An increase in fuel oil prices also contributed to the two-month rise in the fuels and utilities index, while a decrease in utility (piped) gas service prices (-5.5 percent) moderated the advance.  Over the year, electricity prices increased 0.5 percent, while utility gas prices dropped 18.3 percent.  The overall fuels and utilities index fell 8.9 percent since June 2008.  The shelter index increased 0.4 percent from April to June, reflecting higher prices for owners’ equivalent rent of primary residence (0.8 percent) and rent of primary residence (0.4 percent).  Since last June, prices increased for both of these published components of the shelter index, up 1.0 and 1.5 percent, respectively.  Over the year, shelter prices rose 0.7 percent.  Prices for household furnishings and operations were 1.0 percent higher since April and 0.6 percent higher since last June.  The overall housing index fell 0.8 percent from its year-ago level.

The medical care index was unchanged over the last two months but was 2.2 percent higher since last June.

The remaining categories had lower prices from April to June.  Apparel prices fell 8.5 percent since April; the seasonal decrease was larger than the average April-June decline of 5.0 percent during the last five years.  Lower prices for women’s suits and separates, girls’ apparel, and women’s footwear led the recent decrease.  Over the year, apparel prices were 4.3 percent lower.

The food and beverages index declined 1.0 percent from April to June following a 0.5-percent increase in the previous two-month period.  The recent decrease was dominated by lower prices for food at home, which fell 1.9 percent since April—the largest two-month decline since December 2006.  Prices for alcoholic beverages also declined from April to June (-0.4 percent), while food away from home prices were unchanged.  Over the last 12 months, prices rose for all three components—food at home (0.5 percent), alcoholic beverages (4.1 percent), and food away from home (2.9 percent).  The overall food and beverages index was 1.7 percent higher than last June.

The recreation index fell 0.7 percent over the last two months due mainly to lower prices for cable and satellite television and radio service.  Since June 2008, recreation prices edged down 0.3 percent.

The education and communication index inched down 0.1 percent since April but was 3.5 percent higher than last June.

The other goods and services index was also 0.1 percent lower over the last two months.  Due to advances in four of the last six bimonthly periods, 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, advanced 6.5 percent over the year.

The energy index, which reflects prices for gasoline and household fuels, rose 11.9 percent from April to June, due to higher prices for gasoline (26.4 percent), electricity (7.7 percent), and fuel oil.   Lower prices for utility (piped) gas (-5.5 percent) helped to moderate the overall advance in the energy index over the last two months.  Since last June, energy prices dropped 23.9 percent, the largest over-the-year decline since the inception of the index in December 1977.

The two-month advance in the CPI reflected increases in both the commodities index, up 1.4 percent, and the services index, up 0.7 percent.  Commodities prices fell 6.8 percent over the year—the largest 12-month decrease since the inception of the index in January 1967—while services prices rose 0.9 percent since last June.

The CPI-U for the Philadelphia area stood at 223.810 on the 1982-84=100 reference base, which means that a market basket of goods and services which averaged $100.00 in 1982-84 would have cost $223.81 in June 2009.

The Philadelphia-Wilmington-Atlantic City, Pa.-N.J.-Del.-Md., Consolidated Metropolitan Statistical Area (CMSA), includes Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in Pennsylvania; Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, and Salem Counties in New Jersey; New Castle County in Delaware; and Cecil County in Maryland.

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.)

Last Modified Date: September 23, 2009

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