October 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) declined 0.3 percent in October, before seasonal adjustment, to a level of 177.7 (1982- 84=100), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. For the 12-month period ended in October, the CPI-U increased 2.1 percent.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) decreased 0.5 percent in October, prior to seasonal adjustment. The October level of 174.0 was 2.0 percent higher than the index in October 2000.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U declined 0.3 percent in October after increasing 0.4 percent in September. The energy index, which rose 2.6 percent in September, fell 6.3 percent in October. The index for petroleum-based energy declined 10.2 percent and the index for energy services fell 2.5 percent. The food index rose 0.5 percent in October, following a 0.2 percent rise in September. Excluding food and energy, the CPI-U rose 0.2 percent for the fourth consecutive month. A sharp downturn in the index for tobacco and smoking products was largely offset by increases in the indexes for shelter and for telephone services.

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

During the first 10 months of 2001, the CPI-U rose at a 2.1 percent seasonally adjusted annual rate (SAAR). This compares with an increase of 3.4 percent for all of 2000. The energy index, which increased in double- digit figures in both 1999 and 2000, has declined at a 7.2 percent SAAR thus far in 2001. In the first 10 months of 2001, petroleum-based energy costs decreased at a 13.5 percent SAAR, and charges for energy services fell at a 0.7 percent annual rate. The food index has risen at a 3.6 percent SAAR thus far in 2001, following a 2.8 percent increase for all of 2000. Excluding food and energy, the CPI-U has advanced at a 2.8 percent rate thus far in 2001, compared with a 2.6 percent rise for all of 2000.

The food and beverages index advanced 0.5 percent in October. The index for food at home, which rose 0.2 percent in September, increased 0.5 percent in October. The index for meats, poultry, fish, and eggs increased 0.7 percent, following a 0.1 percent rise in September. Poultry prices, which declined 1.3 percent in September, increased 2.5 percent in October. The index for pork increased 0.4 percent, while beef prices declined 0.1 percent. The index for dairy products rose 0.8 percent in October after registering a 0.3 percent rise in September, reflecting a 1.2 percent increase in milk prices. The indexes for nonalcoholic beverages and for other food at home each turned up in October, advancing 0.6 and 0.7 percent, respectively. Within these groups, prices for carbonated drinks and for margarine showed large upturns. On the other hand, the index for fruits and vegetables, which increased 1.3 percent in September, rose 0.1 percent in October. A 1.1 percent drop in the index for fresh vegetables offset a 1.1 percent increase in the index for fresh fruits. Prices for processed fruits and vegetables rose 0.5 percent. The index for cereal and bakery products rose 0.1 percent in October, following a 0.2 percent rise in September. The other two components of the food and beverages index--food away from home and alcoholic beverages- -each increased 0.3 percent in October.

The housing index declined for the second consecutive month--down 0.1 percent in October. Shelter costs, which were unchanged in September, rose 0.2 percent rise in October. Within shelter, the indexes for rent and owners' equivalent rent each rose 0.4 percent, while the index for lodging away from home declined 1.8 percent. The index for fuels and utilities declined for the fourth consecutive month--down 2.1 percent in October. The indexes for natural gas and for electricity fell 6.8 and 0.5 percent, respectively. The index for fuel oil declined 5.2 percent. The index for household furnishings and operations increased 0.1 percent in October, the same as in September.

The transportation component, which increased 1.6 percent in September, turned back down in October, declining 2.2 percent. The index for gasoline, which rose 8.6 percent in September, declined 10.7 percent in October. Gasoline prices have declined 20.8 percent in the five-month period following the peak level reached in May 2001. The index for new vehicles rose 0.1 percent in October. (Prior to seasonal adjustment, new vehicle prices rose 0.6 percent. As of October, about 30 percent of the new vehicle sample was represented by 2002 models. The 2002 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 2002 vehicles represented in the Producer Price Index sample, see news release USDL-01-405, dated November 9, 2001.) The index for used cars and trucks declined for the seventh consecutive month--down 0.3 percent in October. Airline fares declined for the fourth consecutive month following a sharp increase in June--down 2.5 percent in October.

The index for apparel advanced 0.6 percent in October, the same as in September. (Prior to seasonal adjustment, apparel prices rose 2.1 percent, reflecting the continued introduction of higher-priced fall- winter wear.)

Medical care costs rose 0.4 percent in October to a level 4.6 percent higher than a year ago. In October, the index for medical care commodities--prescription drugs, nonprescription drugs, and medical supplies--increased 0.4 percent. The index for medical care services rose 0.5 percent. Charges for professional services and for hospital and related services increased 0.3 and 0.7 percent, respectively.

The index for recreation increased 0.1 percent in October. The index for club membership dues and fees for participant sports rose 0.4 percent, and the index for fees for lessons or instruction rose 1.1 percent. These increases were partially offset by a 0.2 percent drop in the index for admissions to movies, theaters, concerts, and sporting events.

The index for education and communication, which was unchanged in September, increased 0.6 percent in October. Educational costs rose 0.6 percent and the index for communication increased 0.5 percent. Within the latter index, charges for telephone services rose 0.7 percent; local charges rose 0.4 percent and long distance charges increased 1.0 percent. Partially offsetting the increase in the index for telephone services was a 1.1 percent decline in the index for personal computers and peripheral equipment.

The index for other goods and services, which rose 1.5 percent in September, declined 0.7 percent in October. The index for tobacco and smoking products--down 3.2 percent in October after increasing 4.6 percent in September--was responsible for both the September increase and the October 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 declined 0.4 percent in October.

Consumer Price Index data for November are scheduled for release on Friday, December 14, 2001, at 8:30 A.M. (EST).

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.