Consumer Price Index Summary
FOR TECHNICAL INFORMATION:
Patrick C. Jackman (202) 691-7000 USDL-99-355
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INTERNET ADDRESS: Tuesday, December 14, 1999
http://stats.bls.gov/cpihome.htm
CONSUMER PRICE INDEX: NOVEMBER 1999
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1
percent in November, before seasonal adjustment, to a level of 168.3 (1982-
84=100), the Bureau of Labor Statistics of the U.S. Department of Labor
reported today. For the 12-month period ended in November, the CPI-U
increased 2.6 percent.
The Consumer Price Index for Urban Wage Earners and Clerical Workers
(CPI-W) also rose 0.1 percent in November, prior to seasonal adjustment.
The November level of 165.1 was 2.7 percent higher than the index in
November 1998.
CPI for All Urban Consumers (CPI-U)
On a seasonally adjusted basis, the CPI-U rose 0.1 percent in
November, following a 0.2 percent increase in October. The food index
rose 0.1 percent in November, following increases of 0.2 percent in each
of the preceding four months. The energy index, which declined 0.1
percent in October, was unchanged in November. The index for petroleum-
based energy fell 0.6 percent, while the index for energy services
increased 0.4 percent. Excluding food and energy, the CPI-U rose 0.2
percent in November, the same as in October. A larger increase in shelter
costs was offset by a downturn in the index for apparel and a smaller
increase in airline fares.
Table A. Percent changes in CPI for Urban Consumers (CPI-U)
Seasonally adjusted Un-
Compound adjusted
Expenditure Changes from preceding month annual rate 12-mos.
Category 1999 3-mos. ended ended
May June July Aug. Sep. Oct. Nov. Nov. `99 Nov. `99
All Items .0 .0 .3 .3 .4 .2 .1 2.9 2.6
Food and beverages .4 .0 .2 .2 .2 .2 .1 2.4 2.0
Housing .1 .2 .1 .2 .4 .1 .3 3.2 2.2
Apparel -.2 -.4 -.9 -.3 1.2 .6 -.5 5.7 -1.0
Transportation -.5 -.6 1.2 .9 .6 .2 .0 3.3 4.3
Medical care .2 .4 .3 .4 .3 .2 .4 3.4 3.5
Recreation .2 .0 .0 .0 -.5 .1 .2 -.8 .6
Education and
communication -.1 .0 .2 .2 .0 .2 .3 2.0 1.2
Other goods and
services -.2 .2 .9 -.2 1.9 .1 .0 8.0 9.4
Special Indexes
Energy -1.3 -1.2 2.1 2.7 1.7 -.1 .0 6.4 10.6
Food .4 .0 .2 .2 .2 .2 .1 2.5 1.9
All Items less
food and energy .1 .1 .2 .1 .3 .2 .2 3.0 2.1
See page 4 for a note on the use of hedonic models to adjust prices of
audio and video products in the CPI for changes in quality.
During the first 11 months of 1999, the CPI-U rose at a 2.7 percent
seasonally adjusted annual rate (SAAR). This compares with an increase of
1.6 percent for all of 1998. The energy index, which declined 8.8 percent
in 1998, has risen at a 12.8 percent SAAR thus far in 1999. In the first
11 months of 1999, petroleum-based energy costs increased at a 27.0
percent SAAR, and charges for energy services rose at a 2.3 percent annual
rate. The food index has risen at a 2.0 percent SAAR thus far in 1999,
following a 2.3 percent increase for all of 1998. Excluding food and
energy, the CPI-U has advanced at a 2.0 percent rate thus far in 1999,
compared with a 2.4 percent rise for all of 1998.
The index for food and beverages rose 0.1 percent in November. The
index for food at home also increased 0.1 percent after a 0.2 percent rise
in October. The index for dairy products, which advanced sharply in
September and October, slowed in November--up 0.3 percent--and was largely
responsible for the smaller increase in the index for food at home. The
indexes for fruits and vegetables, for nonalcoholic beverages, and for
cereal and bakery products also contributed to the slightly smaller
November grocery store food increase, declining 0.7, 0.2 and 0.1 percent,
respectively. The index for fruits and vegetables, which fell 0.6 percent
in October, declined 0.7 percent in November. Within the fruits and
vegetables group, the index for fresh vegetables decreased 3.0 percent,
while the index for fresh fruits increased 1.4 percent. (Prior to
seasonal adjustment, fresh vegetable prices rose 0.1 percent, while fresh
fruit prices declined 0.7 percent.) The index for processed fruits and
vegetables fell 1.0 percent. On the other hand, the indexes for meats,
poultry, fish, and eggs and for other food at home each turned up in
November, increasing 0.7 and 0.3 percent, respectively. Within the former
group, prices for eggs, pork, and poultry, each of which had declined in
October, advanced in November, increasing 3.0, 1.4 and 0.8 percent,
respectively. The index for beef rose 0.1 percent in November, following
increases of 1.1 and 0.8 percent in the preceding two months. The other
two components of the food and beverages index--food away from home and
alcoholic beverages--increased 0.2 and 0.6 percent, respectively.
The index for housing rose 0.3 percent in November, following an
increase of 0.1 percent in October. Each of the three major housing
groups--shelter, fuel and utilities, and household furnishings and
operations--contributed to the acceleration. Shelter costs, which
increased 0.1 percent in October, advanced 0.3 percent in November.
Within shelter, the indexes for rent and for owners' equivalent rent each
increased 0.4 percent, while the index for lodging away from home declined
0.2 percent. The index for fuels and utilities increased 0.4 percent in
November, following a 0.2 percent rise in October. The index for natural
gas, which declined 1.4 percent in October, rose 2.2 percent in November.
This advance, coupled with another sharp increase in fuel oil prices--up
2.6 percent in November--more than offset a 0.2 percent drop in the index
for electricity. The index for household furnishings and operations,
which declined 0.2 percent in October, increased 0.1 percent in November.
The transportation component was unchanged in November, following a
0.2 percent rise in October. The gasoline index, which had turned down in
October after advancing sharply earlier this year, declined again in
November--down 0.6 percent. The index for new vehicles was unchanged in
November. (Prior to seasonal adjustment, new vehicle prices rose 0.6
percent. As of November, about 58 percent of the new vehicle sample was
represented by 2000 models. The 2000 models will continue to be phased
in, with appropriate adjustments for quality change, over the next several
months as they replace old models at dealerships. For a report on quality
changes for the 2000 vehicles represented in the Producer Price Index
sample, see news release USDL-99-324, dated November 10, 1999.) The index
for used cars and trucks declined 0.2 percent in November after advancing
6.1 percent in the preceding 7-month period. The index for public
transportation decelerated in November, increasing 0.3 percent after
advancing 3.5 percent in October. Airline fares, which rose 5.3 percent
in October, increased 0.7 percent in November.
The index for apparel declined 0.5 percent in November, following
increases of 1.2 and 0.6 percent in the preceding two months. (Prior to
seasonal adjustment, apparel prices fell 0.7 percent, reflecting the
discounting of prices for both women's and men's wear.)
Medical care costs rose 0.4 percent in November to a level 3.5
percent higher than a year ago. The index for medical care commodities--
prescription drugs, nonprescription drugs, and medical supplies--increased
0.4 percent, with the index for prescription drugs up 0.6 percent. The
index for medical care services rose 0.3 percent. Charges for
professional services and for hospital and related services each increased
0.3 percent.
The index for recreation costs increased 0.2 percent in November. A
2.3 percent increase in the index for club membership dues and fees for
participant sports was partially offset by declines in the indexes for
admissions to sporting events and for toys--down 2.5 and 1.6 percent,
respectively.
The index for education and communication, which increased 0.2
percent in October, rose 0.3 percent in November. Educational costs were
unchanged while the index for communication advanced 0.6 percent. Within
the latter group, an increase of 0.8 percent in the index for telephone
services, largely reflecting a 2.2 percent rise in interstate toll
charges, was partially offset by a 2.5 percent decline in the index for
personal computers and peripheral equipment.
The index for other goods and services was virtually unchanged in
November, following a 0.1 percent rise in October. Cigarette prices
declined for the second consecutive month--down 1.0 percent in November--
reflecting discounting of selected major brands. During the past 12
months, however, cigarette prices have risen 32.9 percent.
CPI for Urban Wage Earners and Clerical Workers (CPI-W)
On a seasonally adjusted basis, the CPI for Urban Wage Earners and
Clerical Workers rose 0.1 percent in November.
Table B. Percent changes in CPI for Urban Wage Earners and Clerical
Workers (CPI-W)
Seasonally adjusted Un-
Compound adjusted
Expenditure Changes from preceding month annual rate 12-mos.
Category 1999 3-mos. ended ended
May June July Aug. Sep. Oct. Nov. Nov.`99 Nov. `99
All Items .0 .0 .4 .2 .5 .1 .1 3.2 2.7
Food and beverages .3 .1 .2 .2 .3 .2 .2 2.7 2.0
Housing .1 .1 .2 .1 .4 .1 .2 3.0 2.2
Apparel -.1 -.5 -.7 -.5 1.3 .6 -.4 6.4 -1.3
Transportation -.4 -.5 1.2 1.0 .8 .1 .0 3.6 4.5
Medical care .2 .4 .3 .2 .4 .2 .3 3.6 3.5
Recreation .2 .1 .0 -.1 -.5 .1 .0 -1.6 .2
Education and
communication .0 .1 .2 .1 .0 .3 .3 2.4 1.3
Other goods and
services -.4 .3 1.2 -.4 2.4 .0 -.2 9.2 11.8
Special Indexes
Energy -1.4 -1.2 2.3 2.8 1.8 -.2 .0 6.8 11.4
Food .3 .1 .1 .2 .2 .2 .2 2.7 1.9
All Items less
food and energy .1 .1 .2 .1 .4 .2 .1 2.8 2.1
Consumer Price Index data for December are scheduled for release on
Friday, January 14, 2000, at 8:30 A.M. (EST). Releases for the remainder
of 2000:
Feb.18 Aug. 16
Mar.17 Sep. 15
Apr. 14 Oct. 18
May 16 Nov. 16
June 14 Dec. 15
July 18 Jan. 17, 2001
________________________________________________________________________
Extending the use of hedonic models to adjust prices for Audio and
Video Products in the Consumer Price Index for changes in quality
Effective with the release of the Consumer Price Index (CPI) for
January 2000, the Bureau of Labor Statistics (BLS) will extend hedonic
quality adjustment to items in two CPI strata: Audio equipment and Other
video equipment (which contains video equipment other than televisions). A
hedonic model decomposes the price of a consumer product into implicit
prices for each of its important features and components, thereby
providing an estimate of the value of each feature and component. The
following table gives the relative importance (share of weight), as of
December 1998, of these strata in the Consumer Price Index for all Urban
Consumers (the CPI-U) and in the Consumer Price Index for Urban Wage
Earners and Clerical Workers (the CPI-W).
Relative Importance in Percent
CPI Item Stratum CPI-U CPI-W
Audio equipment 0.152 0.177
Other video equipment 0.075 0.086
There are 12 main audio products in Audio equipment: (1) portable CD
players, (2) table CD players, (3) radios, (4) tape recorders, (5)
portable radio cassette players, (6) headset stereos, (7) receivers, (8)
cassette decks, (9) stereo main speakers, (10) surround speakers, (11)
rack systems, and (12) shelf systems. These items account for about
80 percent of the weight of Audio equipment in the CPI-U and 81 percent in
the CPI-W. The hedonic models estimated for these products rely on home
and portable audio products data that BLS purchased from a secondary
source. Items in this index stratum that will not be subject to hedonic
quality adjustment at this time are automotive audio equipment and audio
accessories and miscellaneous equipment; the data source did not cover
them. Detailed information on the work on Audio products is in a paper by
Kokoski, Waehrer and Rozaklis available from the BLS. /1
The CPI also will use hedonic quality adjustment for video cameras,
which have an estimated 31 percent of the weight within Other video
equipment. (Items in this stratum that will not be subject to hedonic
quality adjustment at this time include video cassette recorders, digital
versatile disc players, satellite dishes and miscellaneous video
equipment.) The hedonic models that BLS analysts developed for video
cameras use observations collected for the CPI supplemented with
additional observations that the BLS collected specifically for this
purpose. A paper on this work is in preparation and will be available
before the release of the January 2000 CPI.
Additional work on hedonic quality adjustment is underway at BLS. In
the future we plan to extend this method to additional CPI items as
satisfactory estimates of hedonic models are developed. We will give CPI
users notice three months before the first use of each additional model
and will have a detailed paper reporting on each model available by the
time of its implementation.
For more information on these changes, write to
Bureau of Labor Statistics
Division of Consumer Prices and Price Indexes
2 Massachusetts Ave. NE, Room 3260
Washington, DC 20212
or telephone or send electronic mail to Paul Liegey at (202) 691-5394,
Liegey_P@bls.gov.
_______________________________
1/ Kokoski, Mary, Keith Waehrer, and Patricia Rozaklis, "Using Hedonic
Methods for Quality Adjustment in the CPI: The Consumer Audio Products
Component", paper presented at the Conference on the Measurement of
Inflation, Cardiff, Wales, September 1, 1999.
__________________________________________________________________________
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 unadjusted for seasonal variation.
Seasonal factors used in computing the seasonally
adjusted indexes are derived by the X-12-ARIMA Seasonal
Adjustment Method. The updated seasonal data at the end of
1977 replaced data from 1967 through 1977. Subsequent
annual updates have replaced 5 years of seasonal data, e.g.,
data from 1994 through 1998 were replaced at the end of
1998. 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 for the
last 5 years, but the seasonally adjusted indexes will be
used before that period.
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 fuel oil and the motor fuels indexes, this
procedure was used to offset the effects that extreme price
volatility would otherwise have had on the estimates of
seasonally adjusted data for those series. For some women's
apparel indexes and the girls' apparel index, the procedure
was used to offset the effects of changes in pricing
methodology. For the tobacco and smoking products index,
this procedure was used to offset the effects wholesale
tobacco prices and legal fees passed on to consumers. For
some alcoholic beverage series, Intervention Analysis
Seasonal Adjustment was used to offset the effects of excise
tax increases. For the Nonalcoholic beverages index, the
procedure was used to offset the effects of a large increase
in coffee prices due to adverse weather. The procedure was
used to account for unusual butter fat supply reductions
affecting the Fats and oils series. For the Water and
sewerage maintenance index, the procedure was used to
account for a data collection anomaly.
A description of Intervention Analysis Seasonal
Adjustment, as well as a list of unusual events modeled and
seasonal factors for these items may be obtained by writing
the Bureau of Labor Statistics, Division of Consumer Prices
and Price Indexes, Washington, DC 20212 or by calling Claire
McAnaw Gallagher on (202) 691-6968 or sending e-mail to
Gallagher_C@BLS.GOV.
Bureau of Labor Statistics
mailto:gibson_s@bls.gov
Last modified:
Tuesday, December 14 1999
URL: /news.release/cpi.nws.htm
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Consumer Price Indexes