PHILADELPHIA AREA CONSUMER PRICE INDEX: AUGUST 2009 (PDF)

Retail prices in the Philadelphia area, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), rose 1.0 percent from June to August, following an identical increase in the previous two-month period, the Bureau of Labor Statistics of the U.S. Department of Labor reported today.  While the recent two-month advance was led by higher prices for housing and apparel, most major categories that comprise the CPI had higher prices over the last two months.  Only the food and beverages and medical care indexes fell since June.  (See chart A.)  Sheila Watkins, the Bureau's regional commissioner, noted that despite four straight bimonthly advances, the local CPI declined 1.0 percent since last August.  Over the last 12 months, the core inflation rate, as measured by the all items less food and energy index, rose 1.9 percent.  (See table 1.)

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

Chart Data

The housing index advanced 1.1 percent from June to August due almost entirely to higher prices for shelter (1.3 percent), in particular owners’ equivalent rent of primary residence.  Over the last two months, prices for owners’ equivalent rent also rose 1.3 percent to a level 2.6 percent higher than a year ago.  Shelter prices increased 1.7 percent since last August.  An advance in fuel oil prices led the 1.4-percent increase in the fuels and utilities index, while prices for electricity and utility (piped) gas service had little or no change since June.  Electricity prices inched up 0.1 percent from June to August but fell 0.5 percent over the year.  Utility gas prices were unchanged over the last two months but dropped 18.4 percent over the year—the largest 12-month decline since the inception of the index in May 1971.  The overall fuels and utilities index fell 8.8 percent since last August.  Moderating the overall advance in the housing index, prices for household furnishings and operations fell 2.2 percent since June and 1.9 percent over the year.  The overall housing index edged down 0.2 percent since August 2008.

Apparel prices rose as they usually do from June to August, jumping 9.6 percent over the last two months.  The recent increase was led by higher prices for a number of items, including women’s suits and separates, men’s suits, sport coats, and outerwear, and women’s footwear.  Apparel prices advanced 7.6 percent since last August—the largest 12-month increase since December 2004.

Following normal seasonal patterns, the education and communication index advanced 1.7 percent from June to August, dominated by higher prices for college tuition and fees.  Over the year, the education and communication index rose 3.8 percent.

Led by higher prices for gasoline, the transportation index edged up 0.3 percent since June.  Gasoline prices rose 1.8 percent over the last two months.  Due to strong decreases in the second half of 2008, gasoline prices were 30.1 percent lower than their year-ago levels.  Also contributing to the two-month advance in the transportation index were higher prices for used cars and trucks and airline fare.  Over the last 12 months, transportation prices fell 11.1 percent.

Dominated by higher cigarette prices, the other goods and services index rose 0.6 percent from June to August.  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 6.0 percent over the year.

The recreation index rose 0.4 percent over the last two months.  Recreation prices were also 0.4 percent higher since August 2008.

The food and beverages index fell 0.3 percent since June as prices decreased for food at home (-0.5 percent) and alcoholic beverages (-0.2 percent).  Prices for food away from home were unchanged over the last two months.  Prices for food at home were down 1.6 percent from their year-ago levels, while prices for food away from home and alcoholic beverages rose 4.1 and 3.2 percent, respectively.  The overall food and beverages index advanced 1.1 percent since last August.

The medical care index edged down 0.2 percent from June to August but was 1.7 percent higher over the year.

The energy index, which reflects prices for gasoline and household fuels, rose 1.1 percent since June, reflecting higher prices for gasoline (1.8 percent) and fuel oil.  Prices for electricity and utility (piped) gas had little or no change over the two-month period.  Since last August, energy prices fell 20.8 percent.

The two-month advance in the CPI reflected increases in both the services index, up 1.1 percent, and the commodities index, up 0.8 percent.  Services prices rose 1.3 percent over the last 12 months, while commodities prices declined 4.9 percent since August 2008.

The CPI-U for the Philadelphia area stood at 226.039 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 $226.04 in August 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.)