EconoIndicators

CPI At a Glance

• CPI-U: 216.632
• Monthly Change: Up 0.8%
• Year-to-year Change: Up 4.2%
• Core CPI-U: Up 0.2% [Seasonally adjusted]
• CPI-W: 212.788
• Monthly Change: Up 1%
• Year-to-year Change: Up 4.5%
• Chained CPI-U: 124.645
• Monthly Change: Up 0.6%
• Year-to-Year Change: Up 3.6%

Important notes: Numbers are not seasonally adjusted unless noted; base year=100 for CPI-U and CPI-W is 1982-1984; base year for C-CPI-U is 1999.

Technorati Tags: Consumer, Price, Index, CPI, inflation

CONSUMER PRICE INDEX: MAY 2008

The Consumer Price Index for All Urban Consumers (CPI-U) increased
0.8 percent in May, before seasonal adjustment, the Bureau of Labor
Statistics of the U.S. Department of Labor reported today. The May level
of 216.632 (1982-84=100) was 4.2 percent higher than in May 2007.

The Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) increased 1.0 percent in May, prior to seasonal adjustment.
The May level of 212.788 (1982-84=100) was 4.5 percent higher than in
May 2007.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U)
increased 0.6 percent in May on a not seasonally adjusted basis. The
May level of 124.645 (December 1999=100) was 3.6 percent higher
than in May 2007. Please note that the indexes for the post-2006 period
are subject to revision.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U advanced 0.6 percent in
May, following a 0.2 percent increase in April. The index for energy,
which was virtually unchanged in April, increased 4.4 percent in May. The
index for petroleum-based energy advanced 5.8 percent and the index for
energy services rose 2.3 percent. The food index rose 0.3 percent in May.
The index for food at home, which advanced 1.5 percent in April, also
increased 0.3 percent, as five of the six major grocery store food groups
registered substantial deceleration. The index for all items less food
and energy advanced 0.2 percent in May, following a 0.1 percent rise in
April. Upturns in the indexes for lodging away from home, for public
transportation, and for household furnishings and operations more than
offset a downturn in the index for apparel.

Table A. Percent changes in CPI for All Urban Consumers (CPI-U)

Seasonally adjusted

Expenditure Compound
Category Changes from preceding month annual Un-
rate adjusted
3-mos. 12-mos.
Nov. Dec. Jan. Feb. Mar. Apr. May ended ended
2007 2007 2008 2008 2008 2008 2008 May 2008 May 2008
All items………. .9 .4 .4 .0 .3 .2 .6 4.9 4.2
Food and beverages .4 .1 .7 .4 .2 .9 .3 5.9 5.0
Housing……….. .4 .3 .2 .2 .4 .3 .5 4.9 3.3
Apparel……….. .6 .1 .4 -.3 -1.3 .5 -.3 -4.3 -.6
Transportation…. 3.5 1.0 .5 -.7 .7 -.7 2.0 8.7 8.1
Medical care…… .4 .3 .5 .1 .1 .2 .2 1.8 4.1
Recreation…….. .2 .0 .2 .1 .3 -.1 .1 1.0 1.2
Education and
communication.. .0 .3 .4 .1 .3 .4 .4 4.2 3.0
Other goods and
services……. .2 .3 .4 .2 .4 .5 .4 5.3 3.6
Special indexes:
Energy………… 6.9 1.7 .7 -.5 1.9 .0 4.4 28.2 17.4
Food………….. .4 .1 .7 .4 .2 .9 .3 6.2 5.1
All items less
food and energy .2 .2 .3 .0 .2 .1 .2 1.8 2.3

During the first five months of 2008, the CPI-U rose at a 4.0 percent
seasonally adjusted annual rate (SAAR). This compares with an increase of
4.1 percent for all of 2007. The index for energy advanced at a 16.5
percent SAAR in the first five months of 2008 after advancing 17.4 percent
in all of 2007. Petroleum-based energy costs increased at a 13.9 percent
annual rate and charges for energy services rose at a 20.3 percent
annual rate. The food index has increased at a 6.3 percent SAAR thus far
this year, following a 4.9 percent rise for all of 2007. Excluding food
and energy, the CPI-U advanced at a 2.0 percent SAAR in the first five
months, following a 2.4 percent rise for all of 2007.

The food and beverages index rose 0.3 percent in May. The index for
food at home increased 0.3 percent, following a 1.5 percent rise in April.
The index for cereal and bakery products recorded its fourth consecutive
large advance–up 1.6 percent in May. Each of the other six major
grocery store food groups decelerated in May. The index for fruits and
vegetables, which increased 2.0 percent in April, was virtually unchanged
in May. A 0.7 percent decline in the indexes for fresh fruits offset
increases in the indexes for fresh vegetables and processed fruits and
vegetables–up 0.5 and 0.4 percent, respectively. The index for meats,
poultry, fish, and eggs, which advanced 0.9 percent in April, rose 0.1
percent in May. Beef prices, which declined 1.1 percent in April, rose
1.5 percent in May. Prices for poultry and for fish and seafood increased
0.8 and 0.9 percent, respectively. These increases were largely offset by
decreases in the indexes for pork, for other meats, and for eggs. The
index for dairy products declined 0.1 percent, following a 1.2 percent
increase in April. Milk prices fell 0.7 percent, but were 10.2 percent
higher than in May 2007. The index for nonalcoholic beverages, which
increased 1.7 percent in April, declined 0.9 percent in May reflecting a
2.2 percent drop in the index for carbonated drinks. The index for other
food at home rose 0.5 percent after advancing 1.9 percent in April. The
other two components of the food and beverages index–food away from home
and alcoholic beverages–increased 0.4 and 0.1 percent, respectively.

The index for housing rose 0.5 percent in May. The index for shelter
increased 0.2 percent, following a 0.1 percent rise in April. Within
shelter, the indexes for rent and owners’ equivalent rent increased 0.2
and 0.1 percent, respectively. The index for lodging away from home,
which had declined in each of the preceding three months, increased 1.3
percent in May. (Prior to seasonal adjustment, charges for lodging away
from home declined 0.5 percent in May.) The index for household energy
registered its fourth consecutive large increase–up 2.8 percent in May.
The index for fuel oil rose 10.4 percent and was 64.0 percent higher
than in May 2007. The indexes for natural gas and for electricity rose
5.6 and 0.9 percent, respectively. During the last 12 months charges for
natural gas and for electricity increased 16.5 and 5.8 percent,
respectively. The index for household furnishings and operations, which
declined 0.1 percent in April, increased 0.2 percent in May.

The transportation index advanced 2.0 percent in May, reflecting
large increases in the indexes for motor fuel and public transportation.
The index for gasoline rose 5.7 percent and was 20.8 percent higher than
in May 2007. (Prior to seasonal adjustment, gasoline prices in May
rose 9.5 percent above their previous peak level recorded in April.) The
index for new vehicles declined 0.1 percent and was 1.2 percent lower than
in May 2007. The index for used cars and trucks also declined 0.3 percent
in May, but was 1.4 percent higher than a year ago. The index for public
transportation advanced 2.3 percent in May, reflecting a 3.2 percent
increase in the index for airline fares. (Prior to seasonal adjustment,
airline fares rose 4.2 percent and were 14.4 percent higher than a year
ago.)

The index for apparel fell 0.3 percent in May following a 0.5
percent increase in April. (Prior to seasonal adjustment, apparel prices
declined 1.1 percent. Prices for women’s and girls apparel decreased 2.2
percent. During the last 12 months, prices for women’s and girls’
clothing fell 5.0 percent, while prices for men’s and boys’ apparel
increased 1.9 percent.)

Medical care costs rose 0.2 percent in May and were 4.1 percent
higher than a year ago. The index for medical care commodities–
prescription drugs, nonprescription drugs, and medical supplies–declined
for the second consecutive month–down 0.7 percent in May. The index for
medical care services increased 0.5 percent. Within the latter group, the
indexes for professional services and for hospital and related services
increased 0.7 and 0.4 percent, respectively.

The index for recreation, which declined 0.1 percent in April, rose
0.1 percent in May. Upturns in the indexes for admissions to movies,
theaters, concerts, and sporting events and for photography, coupled with
larger increases in the indexes for sporting goods and for pets, pet
products and services more than offset declines in the indexes for video
and audio and for toys.

The index for education and communication increased 0.4 percent in
May. Educational costs rose 0.4 percent and the index for communication
costs rose 0.3 percent. Within the latter category, increases in charges
for telephone services more than offset a decline in the index for
information technology, hardware and services. Local land-line telephone
charges rose 0.3 percent and long distance land-line telephone charges
rose 1.3 percent; wireless telephone services were unchanged. The index
for information technology, hardware and services declined 0.5 percent,
reflecting decreases in the indexes for personal computers and peripheral
equipment and for computer software and accessories.

The index for other goods and services increased 0.4 percent in May.
The index for tobacco and smoking products rose 0.8 percent and accounted
for more than half of the increase in this major group.

CPI for Urban Wage Earners and Clerical Workers (CPI-W)

On a seasonally adjusted basis, the CPI for Urban Wage Earners and
Clerical Workers increased 0.7 percent in May.

Table B. Percent changes in CPI for Urban Wage Earners and
Clerical Workers (CPI-W)

Seasonally adjusted

Expenditure Compound
Category Changes from preceding month annual Un-
rate adjusted
3-mos. 12-mos.
Nov. Dec. Jan. Feb. Mar. Apr. May ended ended
2007 2007 2008 2008 2008 2008 2008 May 2008 May 2008
All items………. 1.0 .4 .4 .0 .4 .2 .7 5.4 4.5
Food and beverages .3 .1 .7 .3 .2 .9 .3 6.0 4.9
Housing……….. .4 .2 .2 .2 .5 .4 .5 5.7 3.5
Apparel……….. .4 .2 .8 -.3 -1.2 .2 -.2 -4.8 -.4
Transportation…. 3.8 1.1 .7 -.7 .7 -.7 2.1 8.9 8.7
Medical care…… .4 .3 .6 .1 .1 .2 .1 1.7 4.2
Recreation…….. .1 .1 .2 .1 .3 -.2 .0 .8 .9
Education and
communication.. .0 .2 .3 .1 .2 .4 .3 4.0 2.5
Other goods and
services……. .2 .4 .5 .3 .4 .4 .5 5.2 3.9
Special indexes:
Energy………… 7.2 1.8 .8 -.7 1.9 -.2 4.5 27.7 17.5
Food………….. .3 .1 .7 .3 .2 1.0 .3 6.3 5.1
All items less
food and energy .2 .2 .3 .0 .1 .1 .2 1.8 2.3

Consumer Price Index data for June are scheduled for release on
Wednesday, July 16, 2008, at 8:30 A.M. (EDT).

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 0.06 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 0.12 percent of the 1 month percentage change
based on all retail prices. 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
0.08 and 0.32 percent. For the latest data, including information on how
to use the estimates of standard error, see “Variance Estimates for
Changes in the Consumer Price Index, January 2005- December 2005″ in the
CPI Detailed Report, February 2006. These data are available on the CPI
home page (http://www.bls.gov/cpi), using the following link
http://www.bls.gov/cpi/cpivar2006.pdf

Consumer Price Index (CPI) - May 2008 [PDF]

Source: Department of Labor, Bureau of Labor Statistics