October 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 October, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The October level of 181.3 (1982-84=100) was 2.0 percent higher than its level in October 2001.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also rose 0.2 percent in October, prior to seasonal adjustment. The October level of 177.3 was 1.9 percent higher than the index in October 2001.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U rose 0.3 percent in October, following an increase of 0.2 percent in September. The index for food rose 0.1 percent in October. The index for food at home declined 0.1 percent, reflecting decreases in the indexes for fruits and vegetables and for meats, poultry, fish, and eggs. Energy costs advanced for the fourth consecutive month--up 1.9 percent in October--and accounted for about half of the overall October advance. Within energy, the index for petroleum- based energy rose 3.3 percent and the index for energy services increased 0.4 percent. Excluding food and energy, the CPI-U rose 0.2 percent after increasing 0.1 percent in September. Larger increases in the indexes for shelter, for medical care, and for recreation more than offset a sharp drop in cigarette prices.

See page 3 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.

During the first 10 months of 2002, the CPI-U rose at a 2.7 percent seasonally adjusted annual rate (SAAR). This compares with an increase of 1.6 percent for all of 2001. The index for energy, which declined 13.0 percent in 2001, increased at a 14.2 percent SAAR in the first 10 months of 2002. Petroleum-based energy costs increased at a 31.8 percent annual rate and charges for energy services rose at a 0.3 percent annual rate. The food index has increased at a 1.2 percent SAAR thus far this year, following a 2.8 percent rise for all of 2001. Excluding food and energy, the CPI-U advanced at a 2.1 percent SAAR in the first 10 months, following a 2.7 percent rise in all of 2001.

The food and beverages index increased 0.1 percent in October. The index for food at home declined 0.1 percent in October, following a 0.3 percent increase in September. Decreases in the indexes for fruits and vegetables and for meats, poultry, fish, and eggs--down 0.9 and 0.4 percent, respectively--more than offset increases in the other major food at home groups. Within the fruits and vegetables group, the index for fresh vegetables declined 1.8 percent, the index for fresh fruits fell 0.2 percent, and the index for processed fruits and vegetables decreased 0.4 percent. Each of the main groups within the index for meats, poultry, fish, and eggs declined in October. The index for meats decreased 0.2 percent, reflecting a drop in prices for lamb and mutton; the indexes for pork and for beef were unchanged and rose 0.1 percent, respectively. The indexes for cereal and bakery products and for other food at home rose 0.4 and 0.3 percent, respectively. The other two major food at home groups-- dairy products and nonalcoholic beverages--each increased 0.1 percent. The small advance in the index for dairy products was its first increase in five months, while the index for nonalcoholic beverages had registered a 2.2 percent increase in September. The other two components of the food and beverages index, food away from home and alcoholic beverages, increased 0.2 and 0.4 percent, respectively.

The index for housing rose 0.3 percent in October, following a 0.1 percent rise in September. Shelter costs, which increased 0.1 percent in September, advanced 0.2 percent in October. Within shelter, the indexes for rent and owners' equivalent rent each increased 0.3 percent, while the index for lodging away from home was unchanged. (Prior to seasonal adjustment, the index for lodging away from home declined 0.5 percent.) The index for fuels and utilities rose 0.4 percent in October, the same as in September. The index for fuel oil increased 1.9 percent in October, and prices for fuel oil have risen 8.6 percent in the first 10 months of 2002. In October, the index for natural gas rose 2.9 percent, while the index for electricity declined 0.5 percent. (Prior to seasonal adjustment, fuel oil prices rose 4.3 percent and charges for natural gas rose 3.0 percent, while charges for electricity fell 4.7 percent.) The index for household furnishings and operations rose 0.3 percent in October.

The transportation index rose 0.6 percent in October. The index for gasoline increased for the fifth consecutive month--up 3.8 percent in October. Gasoline prices have risen 29.9 percent thus far this year, but remain 15.1 percent below their peak level in May 2001. The index for new vehicles increased 0.4 percent in October, following a 0.5 percent rise in September. During the last 12 months, however, new vehicle prices have declined 1.1 percent. (As of October, about 35 percent of the new vehicle sample was represented by 2003 models. The 2003 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 2003 vehicles represented in the Producer Price Index sample, see news release USDL-02-634, dated November 15, 2002.) The index for used cars and trucks declined 1.6 percent in October to a level 4.5 percent lower than in October 2001. Airline fares declined for the second consecutive month--down 2.4 percent in October-- and are 5.1 percent lower than a year ago.

The index for apparel was unchanged in October, following a 0.1 percent increase in September. (Prior to seasonal adjustment, apparel prices rose 1.8 percent, reflecting price increases associated with the continued introduction of fall-winter wear.)

The medical care index rose 0.6 percent in October to a level 4.8 percent above its level a year ago. The index for medical care commodities--prescription drugs, nonprescription drugs, and medical supplies--increased 0.3 percent. The index for medical care services rose 0.7 percent in October. Charges for professional services rose 0.6 percent and those for hospital and related services increased 0.9 percent.

The index for recreation, which was unchanged in September, rose 0.3 percent in October. Increases in the indexes for admissions to movies, theaters, concerts, and sporting events and for cable television--up 1.4 and 1.0 percent, respectively--more than offset declines in the indexes for pets and pet products, for photography, and for toys.

The index for education and communication, which declined 0.2 percent in September, was unchanged in October. The education index rose 0.3 percent, reflecting a 0.5 percent increase in the index for college tuition and fees. The index for communication costs declined 0.3 percent, reflecting decreases in the indexes for telephone services and for personal computers and peripheral equipment--down 0.2 and 1.9 percent, respectively.

The index for other goods and services fell 0.5 percent in October, largely as a result of a 3.1 percent decline in the index for tobacco and smoking products. Prices for cigarettes decreased 3.3 percent, reflecting increased 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 October.

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

The C-CPI-U rose 0.2 percent in October on a not seasonally adjusted basis. The October level of 106.2 (December 1999=100) was 1.7 percent higher than the index in October 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 November are scheduled for release on Tuesday, December 17, 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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