August 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 0.2 percent in August, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The August level of 203.9 (1982-84=100) was 3.8 percent higher than in August 2005.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) also increased 0.2 percent in August, prior to seasonal adjustment. The August level of 199.6 (1982-84=100) was 3.9 percent higher than in August 2005.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.3 percent in August on a not seasonally adjusted basis. The August level of 117.9 (December 1999=100) was 3.4 percent higher than in August 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 0.2 percent in August, following a 0.4 percent rise in July. Energy prices, which advanced 2.9 percent in July, rose 0.3 percent in August. Within energy, the index for petroleum based energy increased 0.4 percent and the index for energy services rose 0.2 percent. (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 the announcement following Table B. for more details.

The food index increased 0.4 percent in August. The index for all items less food and energy rose 0.2 percent in August, the same as in July. A sharp upturn in the index for apparel was largely offset by a smaller increase in shelter costs, which rose 0.2 percent in August after increasing 0.4 percent in July.

During the first eight months of 2006, the CPI-U rose at a 4.6 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 22.3 percent SAAR in the first eight months of 2006. Petroleum-based energy costs increased at a 45.7 percent annual rate, while charges for energy services fell at a 2.0 percent annual rate. The food index increased at a 2.4 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 3.0 percent SAAR in the first eight months, following a 2.2 percent rise for all of 2005.

The food and beverages index increased 0.3 percent in August. The index for food at home rose 0.4 percent in August, following a 0.2 percent increase in July. The indexes for meats, poultry, fish, and eggs and for fruits and vegetables each increased 1.0 percent in August. Within the former category, prices for beef, poultry, fish and seafood, and eggs all turned up in August, each advancing more than 1.0 percent, and pork prices rose for the second consecutive month. Increases in the indexes for fresh vegetables and for processed fruits and vegetables--up 3.1 and 0.2 percent, respectively--more than offset a 0.6 percent drop in the index for fresh fruits. The index for nonalcoholic beverages rose 0.8 percent in August after declining 0.5 percent in July, reflecting an upturn in prices for carbonated drinks. The index for cereal and bakery products was unchanged in August, while the indexes for dairy products and other food at home declined 0.8 and 0.2 percent, respectively. The other two components of the food and beverages index--food away from home and alcoholic beverages--increased 0.3 percent and were virtually unchanged, respectively.

The index for housing, which rose 0.3 percent in July, increased 0.2 percent in August. The index for shelter rose 0.2 percent, following a 0.4 percent rise in July. Within shelter, the indexes for rent and owners' equivalent rent increased 0.4 and 0.3 percent, respectively, while the index for lodging away from home fell 0.4 percent. The index for fuels and utilities--up 0.3 percent in August--increased for the second consecutive month after registering declines in each of the preceding five months. The index for natural gas rose 0.7 percent in August, its first increase since January. The index for electricity decreased 0.1 percent. The index for fuel oil rose for the fifth consecutive month--up 2.0 percent in August. During the last 12 months, the indexes for fuel oil, for electricity, and for natural gas have increased 16.8, 12.0, and 2.8 percent, respectively. The index for household furnishings and operations, which was unchanged in the two preceding months, rose 0.2 percent in August.

The transportation index increased 0.2 percent in August. The index for gasoline rose 0.2 percent, following a 5.3 percent increase in July. (Prior to seasonal adjustment, gasoline prices declined 0.5 percent from their peak level registered in July.) The index for new vehicles declined 0.1 percent in August but was 1.0 percent higher than a year ago. (Prior to seasonal adjustment, new vehicle prices fell 0.4 percent.) The index for used cars and trucks increased 0.2 percent in August and was 0.3 percent higher than in August 2005. Within the index for public transportation, airline fares declined 1.9 percent in August after advancing 12.6 percent in the first seven months of the year,

The index for apparel, which declined 1.2 percent in July, increased 0.9 percent in August. (Prior to seasonal adjustment, apparel prices advanced 2.0 percent, as price increases associated with the introduction of fall-winter wear more than offset the decline in prices for discounted spring-summer clothing. Prior to seasonal adjustment, prices for women's clothing, which declined 7.4 percent in July, increased 3.3 percent in August.)

Medical care costs rose 0.4 percent in July and were 4.3 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 0.4 percent in August. The indexes for professional services and for hospital and related services increased 0.3 and 0.8 percent, respectively.

The index for recreation declined 0.1 percent in August, largely reflecting a decline in the index for video and audio. Within this category, the index for televisions declined 2.2 percent.

The index for education and communication increased 0.3 percent in August. Educational costs rose 0.7 percent, reflecting increases of 1.2 percent in the index for college textbooks and 0.6 percent in the index for college tuition. (Prior to seasonal adjustment, charges for college tuition and fees rose 2.9 percent in August and were 7.1 percent higher than a year ago.) The index for communication was unchanged. Within this group, the index for telephone services rose 0.3 percent, as increases in charges for local and long distance land-line telephone services--up 0.4 and 0.9 percent, respectively--more than offset a 0.2 percent decline in wireless telephone services. The index for information technology, hardware, and services declined 1.6 percent in August.

The index for other goods and services, which declined 0.2 percent in July, rose 0.3 percent in August. Declines in the indexes for tobacco and smoking products and for personal care products--each down 0.1 percent-- were more than offset by increases in personal care services. The index for legal services rose 1.2 percent in August.

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 0.4 percent in August.

Consumer Price Index data for September are scheduled for release on Wednesday, October 18, 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.

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.