September 2002 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 September, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The September level of 181.0 (1982-84=100) was 1.5 percent higher than its level in September 2001.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also rose 0.2 percent in September, prior to seasonal adjustment. The September level of 177.0 was 1.3 percent higher than the index in September 2001.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U rose 0.2 percent in September, following an increase of 0.3 percent in August. The index for food, which declined 0.1 percent in August, rose 0.2 percent in September. The index for food at home increased 0.3 percent, with about four-fifths of the increase due to a 2.2 percent rise in the index for nonalcoholic beverages. Energy costs advanced for the third consecutive month--up 0.7 percent in September. Within energy, the index for petroleum-based energy rose 1.0 percent and the index for energy services increased 0.4 percent. Excluding food and energy, the CPI-U rose 0.1 percent after increasing 0.3 percent in August. Smaller increases in the indexes for shelter and for apparel, coupled with downturns in the indexes for education and communication and for public transportation, were largely responsible for the deceleration in September.

See page 5 and table 7 for the release of the Chained Consumer Price Index for All Urban Consumers (C-CPI-U), a new supplemental index of consumer price change.

Consumer prices rose at a seasonally adjusted annual rate (SAAR) of 2.5 percent in the third quarter. This followed increases in the first and second quarters at annual rates of 3.0 and 2.5 percent, respectively, and brings the year-to-date annual rate to 2.6 percent. This compares with an increase of 1.6 percent in all of 2001. The index for energy, which had declined sharply in 2001, following large increases in the preceding two years, has reverted back to its 1999-2000 pattern, advancing at a 13.0 percent SAAR in the first nine months of 2002. Petroleum-based energy costs increased at a 30.2 percent annual rate, while charges for energy services declined at a 0.3 percent annual rate. The food index rose at a 1.2 percent SAAR in the first nine months of 2002. The index for grocery store food prices increased at a 0.4 percent annual rate thus far in 2002, as price increases for fruits and vegetables and for cereal and bakery products--up at annual rates of 5.5 and 1.8 percent, respectively--were largely offset by declines in the indexes for dairy products, for meats, poultry, fish, and eggs, and for other food at home.

Excluding food and energy, the CPI-U advanced at a 2.3 percent SAAR in the third quarter, following increases at rates of 2.1 and 1.9 percent in the first two quarters of 2002. The 2.1 percent SAAR for the first nine months of 2002 compares with a 2.7 percent rise in all of 2001. The principal reason for this deceleration was a smaller rate of increase in shelter costs--up at a 3.3 percent SAAR thus far in 2002 compared with a 4.2 percent rise in all of 2001. A smaller increase in the index for recreation and a larger decline in the index for new and used vehicles also contributed to the moderation thus far this year. The annual rates for selected groups for the last seven and 3/4 years are shown below.

The food and beverages index increased 0.2 percent in September. The index for food at home rose 0.3 percent in September, following a 0.3 percent decline in August. Increases in the indexes for nonalcoholic beverages, for other food at home, and for cereals and bakery products, each of which had declined in August, more than offset declines in the indexes for meats, poultry, fish, and eggs and for dairy products. The index for fruits and vegetables was virtually unchanged. Within the fruits and vegetables group, a 1.9 percent rise in the index for fresh fruits was offset by declines in the indexes for fresh vegetables and for processed fruits and vegetables--down 1.5 and 0.2 percent, respectively. The index for meats, poultry, fish, and eggs declined 0.2 percent in September. Declines in prices for beef, for pork, and for eggs more than offset a 1.0 percent increase in poultry prices. The index for dairy products declined for the fourth consecutive month, down 0.5 percent in September. The index for nonalcoholic beverages, which declined 0.6 percent in August, rose 2.2 percent in September, reflecting price increases for carbonated drinks and nonfrozen noncarbonated juices and drinks. The indexes for cereal and bakery products and for other food at home increased 0.4 and 0.5 percent, respectively. The other two components of the food and beverages index, food away from home and alcoholic beverages, increased 0.2 and declined 0.2 percent, respectively.

The index for housing rose 0.1 percent in September, following a 0.3 percent rise in August. Shelter costs, which rose 0.4 percent in August, increased 0.1 percent in September. Within shelter, the indexes for rent and owners' equivalent rent increased 0.1 and 0.2 percent, respectively, while the index for lodging away from home declined 0.6 percent. (Prior to seasonal adjustment, the indexes for rent and for owners' equivalent rent increased 0.2 and 0.4 percent, respectively, while the index for lodging away from home declined 5.0 percent.) The index for fuels and utilities rose 0.4 percent in September. The index for fuel oil increased 1.9 percent in September and has risen 10.0 percent in the first nine months of 2002. In September, the indexes for natural gas and for electricity rose 1.0 and 0.1 percent, respectively. (Prior to seasonal adjustment, fuel oil prices rose 3.3 percent and charges for natural gas rose 1.1 percent, while charges for electricity fell 0.2 percent.) The index for household furnishings and operations declined 0.2 percent in September.

The transportation index rose 0.3 percent in September. The index for gasoline increased for the fourth consecutive month--up 1.0 percent in September. Gasoline prices have risen 26.9 percent thus far this year, but remain 17.1 percent below their peak level in May 2001. The index for new vehicles increased 0.5 percent in September, its first monthly advance since last December. (About 15 percent of the new vehicle sample in September was represented by 2003 models.) New vehicle prices are 1.1 percent lower than in September 2001. The index for used cars and trucks declined 0.8 percent in September. During the last 12 months, the index for used cars and trucks has declined 3.2 percent. Airline fares declined 2.1 percent in September and are 5.2 percent lower than a year ago.

The index for apparel increased 0.1 percent in September, following a 1.1 percent increase in August. (Prior to seasonal adjustment, apparel prices rose 3.4 percent, reflecting price increases associated with the introduction of fall-winter wear.)

The medical care index rose 0.3 percent in September to a level 4.6 percent above its level a year ago. The index for medical care commodities--prescription drugs, nonprescription drugs, and medical supplies--increased 0.2 percent. The index for medical care services rose 0.4 percent in September. Charges for professional services were virtually unchanged, while those for hospital and related services increased 0.7 percent.

The index for recreation was unchanged in September, following increases of 0.1 percent in each of the preceding two months. Increases in the indexes for recreational reading materials and for cable television- -up 0.7 and 0.5 percent, respectively--were offset by declines in the indexes for sporting goods, for pets and pet products, for photography, and for toys.

The index for education and communication, which increased 0.7 percent in August, declined 0.2 percent in September. The education index rose 0.6 percent, reflecting a 0.6 percent increase in the index for college tuition and fees. (Prior to seasonal adjustment, charges for college tuition and fees rose 2.4 percent, bringing the change over the last 12 months to 7.2 percent.) The index for communication costs declined 0.8 percent, reflecting decreases in the indexes for telephone services and for personal computers and peripheral equipment--down 0.5 and 4.1 percent, respectively.

The index for other goods and services rose 0.4 percent in September, reflecting a 1.6 percent rise in the index for tobacco and smoking products. Prices for cigarettes increased 1.7 percent, reflecting decreased discounting of some major brands.

CPI for Urban Wage Earners and Clerical Workers (CPI-W)

On a seasonally adjusted basis, the CPI for Urban Wage Earners and Clerical Workers increased 0.2 percent in September.

Chained Consumer Price Index for All Urban Consumers (C-CPI-U)

The C-CPI-U rose 0.2 percent in September on a not seasonally adjusted basis. The September level of 106.0 (December 1999=100) was 1.2 percent higher than the index in September 2001. Table 7 contains the most recent indexes for all items and the component series that are published. Data will be published monthly in the CPI Detailed Report and are available on the CPI home page: http://www.bls.gov/cpi/. Please note that the indexes for the post-2000 period are subject to revision.

Consumer Price Index data for October are scheduled for release on Tuesday, November 19, 2002, at 8:30 A.M. (EST).

NOTE ON A NEW, SUPPLEMENTAL INDEX OF CONSUMER PRICE CHANGE

The Bureau of Labor Statistics began publishing a consumer price index (CPI) called the Chained Consumer Price Index for All Urban Consumers, effective with release of July data on August 16, 2002. Designated the C-CPI-U, the index supplements the existing indexes already produced by the BLS: the CPI for All Urban Consumers (CPI-U) and the CPI for Urban Wage Earners and Clerical Workers (CPI-W).

The C-CPI-U employs a Tornqvist formula and utilizes expenditure data in adjacent time periods in order to reflect the effect of any substitution that consumers make across item categories in response to changes in relative prices. The new measure, said to be a "superlative" index, is designed to be a closer approximation to a "cost-of-living" index than the CPI-U and CPI-W. The use of expenditure data for both a base period and the current period in order to average price change across item categories distinguishes the C-CPI-U from the other CPI measures, which use only a single expenditure base period to compute the price change over time. In 1999, the BLS introduced a geometric mean estimator for averaging prices within most of the index's item categories in order to approximate the effect of consumers' responses to changes in relative prices within these item categories. The geometric mean estimator is used in the C-CPI-U in the same item categories in which it is now used in the CPI-U and CPI-W. (See Monthly Labor Review, October 1998, pp. 3-7.)

Expenditure data required for the calculation of the C-CPI-U are available only with a time lag. Thus, the C-CPI-U is being issued first in preliminary form using the latest available expenditure data at this time and will be subject to two subsequent revisions. Accordingly, with release of the July data, "final" values of the C-CPI-U have been issued for the 12 months of 2000, "interim" values have been issued for the 12 months of 2001, and "initial" values have been issued for January-July 2of 2002. In February 2003, with release of the January 2003 index, revised interim indexes for the 12 months of 2002 will be published, and the index values for 2001 will be revised and will become final. Then, in February 2004, when the monthly expenditure data from calendar year 2002 become available, C-CPI-U indexes for the 12 months of 2002 will be issued in final form and values for the 12 months of 2003 will be revised and issued as interim. The C-CPI-U index revisions are expected to be small, but in principle each monthly index could be revised from its previously published level.

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