Consumer Price Index, Washington-Baltimore – July 2011 (PDF)

The Consumer Price Index for All Urban Consumers (CPI-U) in the Washington-Baltimore area inched up 0.1 percent from May to July, the U.S. Bureau of Labor Statistics reported today. Sheila Watkins, the Bureau’s regional commissioner, noted that an advance in the all items less food and energy index (0.6 percent) was nearly offset by decreases in the energy index (-3.6 percent) and food index (-0.1 percent) since May. Within the all items less food and energy index, higher prices for shelter led the two-month increase. (Data in this report are not seasonally adjusted. Accordingly, two-month changes may reflect the impact of seasonal influences.)

Over the last 12 months, the CPI-U rose 4.1 percent—the largest over-the-year increase since September 2008. (See chart 1 and table A.) Over the last year, prices increased for all items less food and energy (2.8 percent), energy (15.1 percent), and food (5.1 percent). (See table 1.)

Food

The food index inched down 0.1 percent from May to July, as did both of its components, food away from home and food at home. Within the food at home group, lower prices for various items led by chicken and breakfast cereal were nearly offset by higher prices for a number of items including processed fish and seafood and frozen fruits and vegetables.

Over the year, the food index rose 5.1 percent—the largest 12-month advance since November 2008. The recent increase reflected higher prices for both food at home (5.3 percent) and food away from home (4.9 percent).

Energy

The energy index, which includes prices for household and transportation fuels, fell 3.6 percent since May due to an 8.4-percent drop in gasoline prices. Moderating the two-month decrease in the energy index was a 4.2-percent seasonal advance in electricity prices, which typically rise in June as summer rate schedules are introduced, then decline in October. Prices for utility (piped) gas service were also higher over the last two months, up 3.6 percent.

Energy prices advanced 15.1 percent since July 2010 due almost entirely to a 35.5-percent jump in gasoline prices. Lower prices for electricity (-5.1 percent) and utility (piped) gas service (-15.3 percent) moderated the 12-month increase in the energy index.

All items less food and energy

The index for all items less food and energy rose 0.6 percent from May to July, due largely to a 0.8-percent increase in shelter prices. Also contributing to the two-month advance in the all items less food and energy index was a 1.7-percent rise in the education and communication index. Partially offsetting these and other advances was a seasonal decrease in apparel prices, which fell 2.7 percent since May.

Over the last 12 months, the index for all items less food and energy increased 2.8 percent. The advance was led by higher shelter prices, up 2.8 percent since July 2010. Price decreases for household furnishings and operations (-3.5 percent) and recreation (-1.8 percent) moderated the over-the-year increase in the all items less food and energy index.

The September 2011 Consumer Price Index for Washington-Baltimore is scheduled to be released on October 19, 2011, at 8:30 a.m. (ET).

Technical Note

The Consumer Price Index (CPI) is a measure of the average change in prices over time in a fixed market basket of goods and services. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) a CPI for All Urban Consumers (CPI-U) which covers approximately 87 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 32 percent of the total population. The CPI-U includes, in addition to wage earners and clerical workers, 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 CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors’ and dentists’ services, drugs, and the other goods and services that people buy for day-to-day living. Each month, prices are collected in 87 urban areas across the country from about 4,000 housing units and approximately 26,000 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.

The index measures price changes from a designated reference date (1982-84) that equals 100.0. An increase of 16.5 percent, 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 see the CPI home page on the Internet at www.bls.gov/cpi and the BLS Handbook of Methods, Chapter 17, The Consumer Price Index, available on the Internet at www.bls.gov/opub/hom/homch17_a.htm.

In calculating the index, price changes for the various items in each location are averaged together with weights that represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. Because the sample size of a local area is smaller, the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index, although their long-term trends are quite similar. NOTE: Area indexes do not measure differences in the level of prices between cities; they only measure the average change in prices for each area since the base period.

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.

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For personal assistance or further information on Consumer Price Indexes, as well as other Bureau products, contact the Mid-Atlantic Information Office at (215) 597-3282 from 8:30 a.m. to 12:00 p.m. and 1:00 p.m. to 3:30 p.m. ET.