August 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 August to a level of 157.3 (1982-84=100), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. For the 12-month period ended in August, the CPI- U increased 2.9 percent.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) rose 0.1 percent in August, prior to seasonal adjustment. The August 1996 CPI-W level of 154.5 was 2.9 percent higher than the index in August 1995.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U rose 0.1 percent in August, following a 0.3 percent increase in July. The energy index declined for the third consecutive month--down 0.6 percent in August and 3.2 percent for the 3-month period--after increasing 9.4 percent in the 6-month period ended in May. The index for petroleum-based energy declined 1.6 percent in August, while the index for energy services rose 0.6 percent. The food index rose 0.4 percent in August, reflecting sharp increases in prices for meats and for dairy products. Excluding food and energy, the CPI-U rose 0.1 percent, following a 0.3 percent increase in July. The deceleration in August was due to a substantially smaller increase in shelter costs and a larger decline in the index for apparel and upkeep.

See page 4 for the announcement of a change in the hospital and related service component of the CPI.

During the first 8 months of 1996, the CPI-U rose at a 3.2 percent seasonally adjusted annual rate (SAAR). This compares with a 2.5 percent increase for all of 1995. Increases in the food and energy components, which acted as moderating influences throughout most of the past 5 years, have been responsible for the acceleration thus far in 1996. Energy costs, which declined last year, have increased at a 7.3 percent rate, with petroleum-based energy advancing at a 10.9 percent SAAR. The food index has risen at a 4.2 percent annual rate in the first 8 months after increasing 2.1 percent in all of 1995. Excluding food and energy, the CPI-U advanced at a 2.7 percent rate in the first 8 months of 1996. This compares with a 3.0 percent increase for all of 1995.

The food and beverage index rose 0.3 percent in August. The index for grocery store foods increased 0.5 percent, the same as in July. Increases in the indexes for dairy products and for meats, poultry, fish, and eggs--up 2.0 and 0.9 percent, respectively--accounted for all of the August advance. The index for dairy products has risen 5.1 percent in the past 3 months and 8.9 percent since August 1995. Within the index for meats, poultry, fish, and eggs, price increases for beef, pork, and poultry each accelerated in August, advancing 1.7, 2.1, and 1.2 percent, respectively. During the 12-month period ended in August, beef prices have risen 1.1 percent, and pork and poultry prices have advanced 12.9 and 8.2 percent, respectively. Each of the other major grocery store food groups either declined or was unchanged in August. The index for fruits and vegetables declined 0.3 percent as a decrease in fresh fruit prices more than offset small increases in the indexes for fresh vegetables and for processed fruits and vegetables. The indexes for cereal and bakery products and other food at home were unchanged and down 0.1 percent, respectively. The other two components of the food and beverage index--restaurant meals and alcoholic beverages- -increased 0.2 and 0.3 percent, respectively, in August.

The housing component, which rose 0.4 percent in July, advanced 0.2 percent in August. Shelter costs increased 0.1 percent in August, following a rise of 0.5 percent in July. Within shelter, renters' costs rose 0.1 percent, and homeowners' and maintenance and repair costs each rose 0.2 percent. The index for fuel and other utilities increased 0.4 percent in August. The index for household fuels increased 0.5 percent in August, and the index for other utilities and public services rose 0.3 percent. Among household fuels, the indexes for electricity and for fuel oil increased 0.8 and 0.9 percent, respectively, while the index for natural gas was unchanged. Within the index for other utilities and public services, the index for telephone services rose 0.2 percent, resulting from a 2.0 percent rise in charges for intrastate toll calls. The index for household furnishings and operation rose 0.2 percent in August, following a 0.1 percent increase in July.

The transportation index declined for the third consecutive month-- down 0.2 percent in August--primarily as a result of another decrease in the index for motor fuels. The index for gasoline, which increased 18.2 percent in the period from November 1995 through May, has declined 7.6 percent in the past 3 months, including a 2.0 percent drop in August. As of August, the gasoline index was 11.6 percent below its peak level of December 1990. The index for new vehicle prices rose 0.1 percent in August. (Prior to seasonal adjustment, new vehicle prices fell 0.2 percent.) The index for automobile finance charges increased 1.8 percent in August and has risen 3.9 percent in the past 3 months. The index for used cars was unchanged in August, following declines in each of the 4 preceding months. The index for public transportation decreased 0.1 percent, reflecting price declines for airline fares and for other intercity transportation fares.

The index for apparel and upkeep declined for the third consecutive month--down 1.4 percent in August. The slower introduction of higher priced fall-winter wear, coupled with large seasonal price declines for spring and summer wear, was responsible for the August decrease. (Prior to seasonal adjustment, clothing prices declined 0.2 percent in August.)

Medical care costs rose 0.2 percent in August to a level 3.4 percent above a year ago. The index for medical care commodities-- prescription drugs, non-prescription drugs, and medical supplies-- increased 0.2 percent in August. The index for medical care services also rose 0.2 percent in August. Charges for professional services and for hospital and related services each increased 0.3 percent.

Entertainment costs rose 0.2 percent in August. The indexes for reading materials and for sporting goods and equipment each rose 0.5 percent and in aggregate accounted for over three-fourths of the August entertainment advance.

The index for other goods and services increased 0.3 percent in August, following a 0.4 percent rise in July. Advances in the indexes for college tuition and for school books and supplies--up 1.0 and 1.2 percent, respectively--accounted for about three-fourths of the August 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 rose 0.1 percent in August.

Consumer Price Index data for September are scheduled for release on Wednesday, October 16, 1996, at 8:30 A.M. (EDT).

Changing the Hospital and Related Services Component of the Consumer Price Index

Effective with the release of data for January 1997, the Bureau of Labor Statistics (BLS) will introduce improvements in the way in which the Hospital and related services component of the Consumer Price Index (CPI) is calculated. Two complementary changes will be made:

Items within the hospital and related services component will be reclassified into two main groups, or item strata--Hospital services and Nursing home services, instead of the current three--Hospital rooms, Other inpatient services, and Hospital outpatient services. The definition of the specific items selected for pricing within individual hospitals will be broadened substantially. These newly defined items will be reselected using new procedures in the majority of the hospitals from which price data currently are collected for the CPI.

Additional information on these changes was published in the June 1996 CPI Detailed Report and is available on the Internet. (Go to gopher://stats.bls.gov and access /pub/special.requests/cpi/hospital.txt.) This information may also be obtained by writing to the Bureau of Labor Statistics, Division of Consumer Prices and Price Indexes, 2 Massachusetts Ave. NE, Room 3260, Washington, DC 20212, or by telephoning Elaine Cardenas at (202) 606-6985 ext. 251.