May 1996 Consumer Price Index

Historical release narrative reproduced from the official public-domain source. Statistical tables, standard technical appendices, administrative material and attendance rosters are omitted; formatting is adapted for reading. Figures retain the release's historical context and may have been revised. Consult the linked source for the complete document.

The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent before seasonal adjustment in May to a level of 156.6 (1982- 84=100), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. For the 12-month period ended in May, the CPI-U increased 2.9 percent.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) rose 0.3 percent in May, prior to seasonal adjustment. The May 1996 CPI-W level of 154.0 was 2.9 percent higher than the index in May 1995.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U rose 0.3 percent in May, following increases of 0.4 percent in each of the 2 preceding months. The energy index registered its sixth consecutive increase--up 1.1 percent in May--after declining throughout most of 1995, and accounted for about one-fourth of the May advance in the overall CPI-U. The index for petroleum-based energy increased 1.8 percent in May and the index for energy services rose 0.1 percent. The food index rose 0.1 percent in May. The index for fruits and vegetables, which rose sharply in March and April, declined 0.8 percent in May, offsetting increases in the other major grocery store food groups. Excluding food and energy, the CPI-U rose 0.2 percent after increasing 0.1 percent in April, reflecting increases in the indexes for apparel and upkeep, entertainment, telephone services, and tobacco products, each of which had declined in April.

During the first 5 months of 1996, the CPI-U rose at a 4.1 percent seasonally adjusted annual rate (SAAR). This compares with a 2.5 percent increase for all of 1995. Energy costs, which declined last year, have increased at a 21.0 percent rate, with petroleum-based energy advancing at a 40.8 SAAR. The food index has risen at a 2.9 percent annual rate in the first 5 months. Excluding food and energy, the CPI-U advanced at a 3.0 percent annual rate in the first 5 months of 1996, the same rate as the increase for all of 1995.

The food and beverage index rose 0.1 percent in May. The index for grocery store foods, which increased 0.3 percent in April, was unchanged in May. A decline in the index for fruit and vegetable prices--down 0.8 percent--offset increases in the other major grocery store food groups. The index for fresh fruits decreased 1.6 percent, and the index for fresh vegetables declined 2.6 percent. (Prior to seasonal adjustment, fresh fruit prices rose 0.8 percent, while fresh vegetable prices fell 9.2 percent.) Partially offsetting these declines, the index for processed fruits and vegetables rose 1.9 percent. Among the other major grocery store foods, the indexes for cereal and bakery products and for dairy products rose 0.6 and 0.5 percent, respectively; the indexes for other food at home and for meats, poultry, fish, and eggs each increased 0.1 percent. Within the latter group, the index for beef declined for the sixth consecutive month--down 1.7 percent in May--and, coupled with a 1.8 percent decline in the index for eggs, largely offset increases in the indexes for pork, poultry, and for fish and seafood. The other two components of the food and beverage index--restaurant meals and alcoholic beverages--each increased 0.3 percent in May.

The housing component rose 0.2 percent in May, following increases of 0.3 percent in each of the 2 preceding months. Declines in the indexes for household fuels and household furnishings and operation were responsible for the slightly smaller increase. The index for household fuels, which rose 1.6 percent in April, declined 0.1 percent in May. The index for electricity decreased 1.2 percent and the index for fuel oil fell 2.1 percent, more than offsetting a 3.1 percent rise in the index for natural gas. The index for household furnishings and operation fell 0.2 percent in May, following a 0.1 percent rise in April. Shelter costs advanced 0.2 percent in May, the same as in each of the three preceding months. Within shelter, renters' costs rose 0.2 percent, homeowners' costs increased 0.3 percent, and maintenance and repair costs rose 0.6 percent. The index for other utilities and public services, which declined 0.6 percent in April, rose 1.0 percent in May, reflecting an increase in the index for telephone services. Charges for local telephone calls increased 2.2 percent in May, following a 2.4 percent drop in April; these movements were largely attributable to a one-time refund in the New York area in April and the subsequent return to the regular rate in May.

The transportation index advanced 0.7 percent in May. The index for motor fuels increased 2.3 percent and accounted for about two-thirds of the overall transportation increase. (Prior to seasonal adjustment, prices for gasoline rose 4.7 percent in May, including the quality adjustment to account for the mandated changes to gasoline in California. For more details of this change, see the note on page 4.) Since beginning its upward movement in December, the index for gasoline has risen 18.2 percent. Despite the sharp increases since November, gasoline prices as of May were still 4.3 percent below their peak level of December 1990. Automobile purchase costs continued their pattern of very little movement evident since the introduction of the 1996 models. The indexes for new car prices and for automobile finance charges increased 0.1 and 0.2 percent, respectively, in May. The index for used cars declined 0.9 percent. The index for public transportation increased 2.0 percent, reflecting a 2.3 percent increase in airline fares.

The index for apparel and upkeep, which declined 0.4 percent in April, increased 0.1 percent in May. (Prior to seasonal adjustment, clothing prices fell 0.9 percent, largely reflecting declines in women's and girls' clothing.)

Medical care costs rose 0.3 percent in May to a level 3.7 percent above a year ago. The index for medical care commodities--prescription drugs, non-prescription drugs, and medical supplies--increased 0.2 percent in May. The index for medical care services rose 0.3 percent in May. Charges for professional services and hospital and related services increased 0.3 and 0.4 percent, respectively.

Entertainment costs, which fell 0.1 percent in April, increased 0.4 percent in May. The index for admissions to movies, theaters, concerts, and sporting events rose 1.0 percent, more than offsetting a decline in the index for sporting goods and equipment.

The index for other goods and services advanced 0.4 percent in May, following an increase of 0.3 percent in April. The index for tobacco and smoking products, which fell 0.2 percent in April, increased 0.5 percent in May, accounting for the slightly larger rise 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 rose 0.3 percent in May.

Consumer Price Index data for June are scheduled for release on Tuesday, July 16, 1996, at 8:30 A.M. (EDT).

Quality Adjustment for Gasoline

An adjustment for a change in the quality of gasoline has been made in the May CPI to account for the effects of the mandated changes to gasoline in California associated with the requirements established by the California Air Resources Board. This adjustment affects about 90 percent of the gasoline price quotations collected for the month of May in the State of California. The remainder of these price quotations will reflect the quality adjustment in the June CPI. Without quality adjustment, the May CPI-U gasoline component would have risen approximately 0.9 percentage point more than the published increase of 2.5 percent. (Prior to seasonal adjustment, the increase would have been 0.9 percentage point higher than the 4.7 percent rise.) For more details, see "Gasoline Quality Adjustments Resulting from New California Requirements" in the May 1996 issue of the CPI Detailed Report.