July 2006 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 0.3 percent in July, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The July level of 203.5 (1982-84=100) was 4.1 percent higher than in July 2005.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also increased 0.3 percent in July, prior to seasonal adjustment. The July level of 199.2 (1982-84=100) was 4.3 percent higher than in July 2005.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.1 percent in July on a not seasonally adjusted basis. The July level of 117.6 (December 1999=100) was 3.5 percent higher than in July 2005. Please note that the indexes for the post-2004 period are subject to revision.

CPI for All Urban Consumers (CPI-U)

On a seasonally adjusted basis, the CPI-U advanced 0.4 percent in July, following a 0.2 percent rise in June. Energy costs, which declined 0.9 percent in June, advanced 2.9 percent in July. Within energy, the index for petroleum based energy increased 5.0 percent and the index for energy services rose 0.1 percent. The food index increased 0.2 percent in July. The index for all items less food and energy rose 0.2 percent in July,(cont.)

Effective with release of the January 2007 CPI, BLS will publish index levels to three decimal places. Percent changes based on these more precise indexes will continue to be published to one decimal place. See page 4 for more details.

following increases of 0.3 percent in each of the preceding four months. A sharp drop in the index for apparel was largely responsible for the smaller increase in July.

During the first seven months of 2006, the CPI-U rose at a 4.8 percent seasonally adjusted annual rate (SAAR). This compares with an increase of 3.4 percent for all of 2005. The index for energy, which rose 17.1 percent in 2005, advanced at a 25.3 percent SAAR in the first seven months of 2006. Petroleum-based energy costs increased at a 52.8 percent annual rate while charges for energy services fell at a 2.5 percent annual rate. The food index has increased at a 2.1 percent SAAR thus far this year, following a 2.3 percent rise for all of 2005. Excluding food and energy, the CPI-U advanced at a 3.1 percent SAAR in the first seven months, following a 2.2 percent rise for all of 2005.

The food and beverages index increased 0.2 percent in July. The index for food at home rose 0.2 percent in July, following a 0.4 percent increase in June. The index for fruits and vegetables, which increased 1.3 percent in June, advanced 0.9 percent in July. Increases in the indexes for fresh fruits and for processed fruits and vegetables--up 2.3 and 0.3 percent, respectively--more than offset a 0.3 percent drop in the index for fresh vegetables. The index for cereal and bakery products rose 0.9 percent in July, reflecting in part, a 1.9 percent increase in bread prices. The indexes for dairy products and for other food at home increased 0.1 and 0.5 percent, respectively. Partially offsetting these increases were declines in the indexes for meats, poultry, fish, and eggs and for nonalcoholic beverages--down 0.6 and 0.5 percent, respectively. Within the former category, prices for beef, poultry, other meats, fish and seafood, and eggs each declined, while pork prices turned up in July. The other two components of the food and beverages index--food away from home and alcoholic beverages--increased 0.3 and declined 0.1 percent, respectively.

The index for housing, which rose 0.2 percent in June, increased 0.3 percent in July. The index for shelter rose 0.4 percent in July. Within shelter, the indexes for rent and owners' equivalent rent each increased 0.4 percent and the index for lodging away from home rose 0.6 percent. The index for fuels and utilities turned up in July, registering its first increase in six months. The index for natural gas, which had fallen 19.0 percent in the preceding five month period, was unchanged in July. The index for electricity increased 0.1 percent. The index for fuel oil rose for the fourth consecutive month--up 3.1 percent in July. During the last 12 months, the indexes for fuel oil, for electricity, and for natural gas have increased 19.7, 12.7, and 4.0 percent, respectively. In July, the index for household furnishings and operations was unchanged for the second consecutive month.

The transportation index increased 1.6 percent in July, reflecting an upturn in the index for motor fuel. The index for gasoline rose 5.3 percent, following a 1.0 percent decline in June. (Prior to seasonal adjustment, gasoline prices rose 3.0 percent. As of July, the price of gasoline was 1.9 percent higher than its previous peak level of May 2006.) The index for new vehicles increased 0.1 percent in July and was 0.4 percent higher than a year ago. The index for used cars and trucks increased 0.4 percent in July and was 0.8 percent higher than in July 2005. The index for public transportation increased 0.4 percent in July. (Prior to seasonal adjustment, the index for public transportation rose 1.3 percent, reflecting another increase in airline fares.) Airline fares increased 1.3 percent in July and have advanced 12.6 percent in the first seven months of the year.

The index for apparel registered its first monthly decline since February, down 1.2 percent in July. (Prior to seasonal adjustment, apparel prices declined 4.3 percent, reflecting continued seasonal discounting of spring-summer clothing. Prices for women’s and girls’ clothing, which had registered smaller than usual seasonal declines in the preceding two months, fell a record 7.3 percent in July.)

Medical care costs rose 0.2 percent in July and were 4.0 percent higher than 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 0.2 percent in July. The indexes for professional services and for hospital and related services each increased 0.2 percent.

The index for recreation rose 0.3 percent in July. A 2.4 percent increase in the index for sports vehicles accounted for about three-fourths of the advance in the July recreation index.

The index for education and communication increased 0.3 percent in July. Educational costs increased 0.6 percent while the index for communication was unchanged. Within the latter group, the index for telephone services rose 0.2 percent, as increases in charges for both local land-line telephone services and for wireless telephone services--each up 0.5 percent--more than offset a 0.4 percent decline in land-line long distance telephone services. The index for personal computers and peripheral equipment declined 0.9 percent in July.

The index for other goods and services, which rose 0.6 percent in June, declined 0.2 percent in July. The indexes for tobacco and smoking products and for personal care each decelerated in July. The index for tobacco and smoking products was unchanged after increasing 0.8 percent in June. The index for personal care, which rose 0.5 percent in June, declined 0.2 percent in July.

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 0.5 percent in July.

Consumer Price Index data for August are scheduled for release on Friday, September 15, 2006, at 8:30 A.M. (EDT).

Consumer Price Index Levels to be Published to Three Decimal Places

Effective with the release of the January 2007 Consumer Price Index (CPI), the Bureau of Labor Statistics will display CPI index values to three decimal places in all paper and electronic publications. This change will apply to the All Items Consumer Price Index and all component indexes for the CPI-U, CPI-W, and C-CPI-U, for the U.S. City Average and for all other published areas. In addition, percent changes will be computed based upon the three decimal place indexes rather than the current one decimal place indexes. Percent changes will continue to be rounded to one decimal place.

This change in procedure addresses a rounding issue that has resulted in published percent changes that are 0.1 percentage point higher or lower than the same percent changes based on unrounded index values (i.e., indexes to three or more decimal places). These differences can be particularly important when percent changes are very small. Publishing the index values to three decimal places, and using these values to compute percent changes, will essentially eliminate the rounding differences. This change will only affect the presentation of the index data. The index values will continue to be calculated from underlying price data in the same manner as in the past, and no systematic upward or downward effect on the data will be introduced. The levels of future indexes will be affected only in that they will be published to three decimal places rather than one. Official CPI data previously published will not be revised.

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