August 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) was unchanged in August, before seasonal adjustment, remaining at a level of 177.5 (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 2.7 percent.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also was unchanged in August, prior to seasonal adjustment. The August level of 173.8 was 2.7 percent higher than the index in August 2000.

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 decline in July. The energy index declined for the third consecutive month--down 1.9 percent in August, following a 5.6 percent drop in July. In August, the index for petroleum-based energy declined 2.4 percent and the index for energy services fell 1.4 percent. The food index, which increased 0.3 percent in July, rose 0.2 percent in August. Excluding food and energy, the CPI-U rose 0.2 percent, the same as in July. Larger increases in the indexes for shelter--up 0.5 percent in August, following a 0.1 percent increase in July--and medical care were offset by a downturn in the index for tobacco and smoking products and a larger decline in airline fares.

See page 4 for a note on planned changes in the CPI in 2002.

During the first eight months of 2001, the CPI-U rose at a 2.5 percent seasonally adjusted annual rate (SAAR). This compares with an increase of 3.4 percent for all of 2000. The index for energy, which registered double-digit increases in both 1999 and 2000, declined at a 3.3 percent SAAR during the first eight months of 2001. Food costs, which rose 2.8 percent in all of 2000, have increased at a 3.5 percent SAAR thus far in 2001. Excluding food and energy, the CPI-U has advanced at a 2.9 percent SAAR thus far in 2001, compared with a 2.6 percent rise for all of 2000. Acceleration in the indexes for shelter, for medical care, and for tobacco and smoking products have contributed to the larger rate of advance thus far this year.

The food and beverages index increased 0.2 percent in August. The index for food at home, which rose 0.3 percent in July, increased 0.1 percent in August. Downturns in the indexes for fruits and vegetables and for meats, poultry, fish, and eggs were largely responsible for the moderation in grocery store food prices. The index for fruits and vegetables, which was unchanged in July, declined 0.6 percent in August. A 2.6 percent decline in the index for fresh fruits more than offset increases in the indexes for fresh vegetables and for processed fruits and vegetables--up 0.9 and 0.3 percent, respectively. The index for meats, poultry, fish, and eggs fell 0.4 percent. Beef prices declined for the second consecutive month--down 0.7 percent in August. Despite these declines, beef prices are 7.0 percent higher than in August 2000. The indexes for poultry and pork rose 0.5 and 0.2 percent, respectively. The index for nonalcoholic beverages rose 0.9 percent, reflecting a sharp upturn in the price of carbonated drinks. The index for dairy products rose 0.4 percent in August. Increases in the indexes for ice cream and for cheese more than offset a 0.4 percent decline in milk prices. The other two major food at home groups--cereal and bakery products and other food at home--rose 0.4 and 0.2 percent, respectively. The other two components of the food and beverages index--food away from home and alcoholic beverages--each increased 0.3 percent.

The housing index, which was unchanged in July, increased 0.3 percent in August. Shelter costs, which increased 0.1 percent in July, rose 0.5 percent in August. Within shelter, the index for rent rose 0.4 percent; owners' equivalent rent rose 0.5 percent; and the index for lodging away from home increased 1.0 percent. The index for fuels and utilities declined for the second consecutive month--down 1.0 percent in August. All three major household fuels registered price decreases: the index for fuel oil declined 1.2 percent and the indexes for natural gas and for electricity fell 3.4 and 0.4 percent, respectively. The index for household furnishings and operations, which was unchanged in July, declined 0.1 percent in August.

The transportation component declined for the third consecutive month- -down 0.5 percent in August--reflecting another drop in gasoline prices. The index for gasoline registered its third consecutive decrease in August- -down 2.4 percent. As of August, gasoline prices were 17.0 percent lower than their peak level of May 2001. The index for new vehicles declined 0.2 percent in August. (Prior to seasonal adjustment, prices for new vehicles fell 0.6 percent.) The index for used cars and trucks declined for the fifth consecutive month--down 0.2 percent in August. Airline fares declined for the second consecutive month following a sharp increase in June.

The index for apparel declined for the fifth consecutive month--down 0.6 percent in August. (Prior to seasonal adjustment, apparel prices were unchanged as price increases associated with the introduction of fall- winter wear were offset by seasonal price discounting on spring-summer wear.)

Medical care costs rose 0.5 percent in August to a level 4.5 percent higher than a year ago. In August, the index for medical care commodities- -prescription drugs, nonprescription drugs, and medical supplies-- increased 0.3 percent. The index for medical care services rose 0.6 percent in August. Charges for professional services and for hospital and related services increased 0.5 and 0.7 percent, respectively.

The index for recreation increased 0.2 percent in August, the same as in July. Increases in the August indexes for admissions to movies, theaters, concerts, and sporting events and for pets, pet products and services --up 0.8 and 0.9 percent--more than offset declines in the indexes for video and audio, for photography, and for toys.

The index for education and communication increased 0.5 percent in August, the same as in each of the preceding two months. In August, educational costs rose 0.9 percent, while the index for communication declined 0.1 percent. Within the former group, the indexes for college tuition and fees and for elementary and high school tuition and fees increased 1.7 and 1.3 percent, respectively. (Prior to seasonal adjustment, these indexes rose 2.7 and 3.7 percent, respectively.)

The index for other goods and services, which rose 1.6 percent in July, fell 0.9 percent in August. The index for tobacco and smoking products--down 3.8 percent in August after increasing 4.8 percent in July- -was responsible for both the July increase and the August decline 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 was unchanged in August.

Consumer Price Index data for September are scheduled for release on Friday, October 19, 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.