June 2001 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 in June, before seasonal adjustment, to a level of 178.0 (1982- 84=100), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. For the 12-month period ended in June, the CPI-U increased 3.2 percent.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) rose 0.1 percent in June, prior to seasonal adjustment. The June level of 174.6 was 3.2 percent higher than the index in June 2000.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U rose 0.2 percent in June, following a 0.4 percent increase in May. A downturn in the energy index was partially offset by larger increases in the indexes for food and for all items less food and energy. The energy index, which increased 3.1 percent in May, declined 0.9 percent in June. The index for petroleum- based energy declined 2.2 percent, while the index for energy services rose 0.4 percent. The food index, which increased 0.3 percent in May, rose 0.4 percent in June. Excluding food and energy, the CPI-U rose 0.3 percent in June, following a 0.1 percent increase in May. Larger increases in the indexes for airline fares and for lodging away from home, coupled with an upturn in the index for tobacco and smoking products and a smaller decline in apparel prices, largely accounted for the acceleration in June.

See page 5 for a note on planned changes in the CPI in 2002.

Consumer prices rose at a seasonally adjusted annual rate (SAAR) of 3.7 percent in the second quarter after advancing at a 4.0 percent rate in the first three months of 2001. This brings the year-to-date annual rate to 3.8 percent and compares with an increase of 3.4 percent for all of 2000. The larger increase in the overall CPI-U thus far in 2001 reflects the continued sharp advance in energy prices, coupled with slightly larger advances in the indexes for food and for all items less food and energy. Although the energy index has continued to advance sharply, the composition has changed somewhat over the last 2 « years. Petroleum-based energy costs, which turned up sharply in 1999, have decelerated somewhat, increasing at a 8.8 percent SAAR in the first half of 2001. Charges for energy services, however, have accelerated, increasing at a 13.9 percent annual rate thus far this year. The food index rose at a 3.7 percent SAAR in the first 6 months of 2001, following an increase of 2.8 percent in all of 2000. Grocery store food prices rose at a 3.8 percent SAAR in the first six months, with the largest increases among the six major grocery store food groups in the indexes for meats, poultry, fish, and eggs and for dairy products--up at annual rates of 6.9 and 6.8 percent, respectively.

The CPI-U excluding food and energy advanced at a 2.6 percent rate in the second quarter of 2001, following an increase at a 3.5 percent rate in the first three months of 2001. The advance at a 3.1 percent SAAR for the first half of 2001 compares with a 2.6 percent increase for all of 2000. This acceleration has been concentrated in the services components; the index for services less energy services increased 3.4 percent in all of 2000 and has risen at a 4.3 percent SAAR in the first 6 months of this year. Contributing to this acceleration were larger increases in the indexes for shelter, for medical care services, and for airline fares. The index for commodities less food and energy commodities rose 0.6 percent in all of 2000 and has declined at a 0.1 percent SAAR in the first half of 2001. The rates for selected groups for the last seven and one- half years are shown below.

The food and beverages index rose 0.4 percent in June. The index for food at home rose 0.5 percent in June, following a 0.3 percent rise in May. Upturns in the indexes for fruits and vegetables and for nonalcoholic beverages, coupled with a larger increase in the index for dairy products, were responsible for the acceleration in grocery store food prices. The index for fruits and vegetables rose 1.4 percent in June after declining 0.9 percent in May. The indexes for fresh fruits and for fresh vegetables each turned up in June, increasing 0.9 and 2.2 percent, respectively. The index for processed fruits and vegetables rose 0.8 percent. The index for nonalcoholic beverages rose 0.5 percent in June, following a slight decline in May. The index for dairy products, which rose 0.8 percent in May, advanced 1.3 percent in June, reflecting price increases for milk, ice cream, and cheese. The index for meats, poultry, fish, and eggs rose 0.4 percent in June. An upturn in poultry prices, coupled with small increases in the indexes for beef and pork --up 0.5 and 0.4 percent, respectively--more than offset declines in prices for fish and seafood and for eggs. The index for cereal and bakery products rose 0.2 percent, while the index for other food at home declined 0.3 percent despite another large increase in butter prices. The other two components of the food and beverages index--food away from home and alcoholic beverages--increased 0.3 and 0.4 percent, respectively.

In June, the housing index rose 0.4 percent for the second consecutive month. Shelter costs advanced 0.5 percent in June, the same as in May. Within shelter, the indexes for rent and owners' equivalent rent each rose 0.4 percent, and the index for lodging away from home increased 1.5 percent. (Prior to seasonal adjustment, the index for lodging away from home rose 3.1 percent.) The index for fuels and utilities rose 0.4 percent in June. The index for fuel oil increased 1.3 percent and the index for electricity rose 3.8 percent, more than offsetting a 5.6 percent drop in the index for natural gas. (Prior to seasonal adjustment, fuel oil prices declined 1.6 percent, charges for electricity rose 9.6 percent and charges for natural gas declined 6.0 percent.) The index for household furnishings and operations rose 0.3 percent, reflecting price increases for major appliances, for household paper products, and for household operations--domestic services, lawncare services, moving expenses, and repair of household items.

The transportation component, which advanced 1.2 percent in May, declined 0.2 percent in June, reflecting a downturn in gasoline prices. The index for gasoline fell 2.6 percent in June, following a 6.0 percent rise in May. The index for new vehicles declined 0.1 percent in June and is 0.8 percent lower than its level a year ago. The index for used cars and trucks declined for the third consecutive month--down 0.2 percent in June. The index for public transportation rose 3.8 percent in June, reflecting a 5.0 percent increase in airline fares.

The index for apparel declined for the third consecutive month--down 0.3 percent in June. (Prior to seasonal adjustment, apparel prices fell 2.7 percent, reflecting seasonal price discounting on spring-summer wear.)

Medical care costs rose 0.4 percent in June to a level 4.6 percent higher than a year ago. In June, the index for medical care commodities-- prescription drugs, nonprescription drugs, and medical supplies--increased 0.5 percent. The index for medical care services rose 0.4 percent in June. Charges for professional services and for hospital and related services increased 0.3 and 0.4 percent, respectively.

The index for recreation declined for the second consecutive month-- down 0.2 percent in June. Price declines were recorded in the indexes for video and audio, for sporting goods, for toys, and for club membership dues and fees for participant sports.

The index for education and communication increased 0.5 percent in June, following a 0.1 percent rise in May. Educational costs rose 0.7 percent, reflecting a 1.3 percent increase in the index for educational books. The index for communication advanced 0.2 percent; the index for telephone services increased 0.3 percent, more than offsetting a 2.0 percent drop in the index for personal computers and peripheral equipment.

The index for other goods and services increased 0.4 percent in June, following a 0.4 percent decline in May. The index for tobacco and smoking products, which declined 1.3 percent in May, rose 0.5 in June.

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 0.2 percent in June.

Consumer Price Index data for July are scheduled for release on Thursday, August 16, 2001, at 8:30 A.M. (EDT).

Planned Changes in the Consumer Price Index in 2002

Expenditure Weight Update

As announced in December 1998, the Bureau of Labor Statistics (BLS) will update the consumption expenditure weights in the Consumer Price Index for all Urban Consumers (CPI-U) and in the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) to the 1999-2000 period, effective with release of data for January 2002. The newer weights will replace the 1993-95 weights, which were first used in the index effective with January 1998 data. Additionally, CPI expenditure weights will be updated at two-year intervals subsequent to the 2002 updating. Thus, for example, CPI expenditure weights will be updated to the 2001-02 period effective with release of CPI data for January 2004.

Historically, the introduction of a comprehensive new set of expenditure weights attached to the categories of goods and services in the CPI "market basket" has taken place in the context of the periodic major revisions of the index. Such major revisions have taken place approximately once each decade-in 1940, 1953, 1964, 1978, 1987 and, most recently, in 1998.

The goal in employing more current expenditure weights is to have the CPI reflect, as much as possible, the inflation currently experienced by consumers. More specifically, the use of more current weights will help to ensure that the relative importance of CPI item categories, such as food away from home, college tuition, or medical care services, more accurately reflects how consumers are allocating their spending.

Publication of Overlap CPIs

For the first six months of 2002, BLS will continue to calculate and publish selected CPI-U and CPI-W "overlap" indexes on a not seasonally adjusted basis. These indexes will be compiled using the 1993-95 expenditure pattern that was introduced into the CPI in 1998. Comparison of these index series to the corresponding updated series will enable users of the CPI to observe the effects of the expenditure weight change. The subsequent expenditure updates scheduled in 2004 and every two years thereafter also will be accompanied by the publication of overlap indexes for a six-month period using the previous expenditure pattern.

Publication of CPI for the Phoenix Area

Effective with release of the July 2002 Consumer Price Index (CPI), BLS will initiate publication of consumer price data specific to the Phoenix-Mesa, Arizona, Metropolitan Statistical Area. As with the national CPI and other local area CPIs, data will be published for each of two population groups, that for all urban consumers (CPI-U) and that for urban wage earners and clerical workers (CPI-W). The Phoenix-Mesa CPI will be published on a semi-annual basis with a reference base of December 2001 = 100. The same amount of item detail will be available for Phoenix- Mesa as is presently available for all other areas published on a semi- annual basis.

Change to Published Item Structure

Effective with release of the January 2002 CPI, BLS will begin publishing an item index for leased cars and trucks. This index series will be available monthly at the U.S. City Average area level for both the CPI-U and CPI-W with a December 2001 = 100 reference base.

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. For a recorded message of Summary CPI data, call (202) 691-5200.