October 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) decreased 0.5 percent in October, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The October level of 201.8 (1982-84=100) was 1.3 percent higher than in October 2005.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) decreased 0.7 percent in October, prior to seasonal adjustment. The October level of 197.0 (1982-84=100) was 0.9 percent higher than in October 2005.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) decreased 0.3 percent in October on a not seasonally adjusted basis. The October level of 117.2 (December 1999=100) was 1.6 percent higher than in October 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 declined 0.5 percent in October, the same as in September. Energy prices, which declined 7.2 percent in September, fell 7.0 percent in October. Within energy, the index for petroleum-based energy decreased 10.7 percent and the index for energy services declined 2.5 percent. The food index increased 0.3 percent in October. The index for all items less food and energy rose 0.1 percent in October, following increases of 0.2 percent in each of the three preceding months. Declines in the indexes for apparel and for lodging while away from home were largely responsible for the smaller advance in October.

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

During the first ten months of 2006, the CPI-U rose at a 2.4 percent seasonally adjusted annual rate (SAAR). This compares with an increase of 3.4 percent for all of 2005. The index for energy, which increased 17.1 percent in 2005, decreased at a 1.5 percent SAAR in the first ten months of 2006. Petroleum-based energy costs were unchanged on average, while charges for energy services fell at a 3.1 percent annual rate. The food index has increased at a 2.7 percent rate thus far in 2006, following a 2.3 percent rise for all of 2005. Excluding food and energy, the CPI-U advanced at a 2.8 percent SAAR in the first ten months of 2006 after increasing 2.2 percent in 2005.

The food and beverages index increased 0.3 percent in October. The index for food at home rose 0.3 percent in October, following a 0.5 percent increase in September. The index for fruits and vegetables, which increased 3.0 percent in September, was virtually unchanged in October. A 0.8 percent increase in the index for fresh vegetables was offset by declines in the indexes for fresh fruits and for processed fruits and vegetables--down 0.7, and 0.2 percent, respectively. The index for meats, poultry, fish, and eggs increased 0.2 percent in October. Beef prices increased 0.6 percent and the index for pork rose 0.3 percent. These increases were partially offset by declines in the indexes for poultry and for eggs. The index for dairy products rose 0.7 percent, reflecting a 1.3 percent increase in the index for milk. Despite the advance in October, milk prices are 1.0 percent lower than in October 2005. The indexes for cereal and bakery products and for nonalcoholic beverages each rose 0.3 percent, and the index for other food at home increased 0.2 percent. The other two components of the food and beverages index--food away from home and alcoholic beverages--increased 0.3 and 0.2 percent, respectively.

The index for housing was virtually unchanged in October. A decline in the index for fuels and utilities offset an increase in shelter costs; the index for household furnishings and operations was unchanged. The index for fuels and utilities registered its first decline in four months- -down 2.2 percent. Each of the three major household fuels contributed to the decline. The index for natural gas decreased 7.7 percent in October and is 24.0 percent lower than a year ago. The index for fuel oil declined 6.1 percent in October and is 7.6 percent lower than in October 2005. The index for electricity decreased 0.2 percent, but charges for electricity are 10.4 percent higher than a year earlier. The index for shelter rose 0.3 percent, the same as in September. Within shelter, the indexes for rent and owners' equivalent rent each increased 0.4 percent, while the index for lodging away from home declined 0.5 percent. (Prior to seasonal adjustment, the index for lodging away from home increased 0.5 percent.)

The transportation index declined 3.1 percent in October, reflecting price decreases for gasoline, for new and used motor vehicles, and for airline fares. The index for gasoline declined 11.1 percent, accounting for about 95 percent of the decline in the overall transportation group. The index for new vehicles declined 0.1 percent in October. (As of October, about 42 percent of the new vehicle sample consisted of 2007 models. The 2007 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 2007 vehicles represented in the Producer Price Index sample, see news release USDL-06-1973, dated November 14, 2006.) New vehicle prices are 0.2 percent lower than in October 2005. The index for used cars and trucks decreased 1.2 percent in October and was 0.9 percent lower than in October 2005. The index for public transportation declined 1.0 percent, reflecting a 1.4 percent drop in airline fares. Airline fares have declined 5.5 percent in the last three months after advancing 12.6 percent in the first seven months of the year.

The index for apparel, which rose 0.6 percent in September, decreased 0.7 percent in October. (Prior to seasonal adjustment, apparel prices rose 1.3 percent, reflecting the continued introduction of fall-winter wear.) During the last 12 months, the index for apparel has increased 0.5 percent, with increases in prices for women's and girls' clothing more than offsetting declines in prices for men's and boys' clothing and for footwear.

Medical care costs rose 0.3 percent in October and were 4.0 percent higher than a year ago. The index for medical care commodities-- prescription drugs, nonprescription drugs, and medical supplies--was unchanged. The index for medical care services rose 0.4 percent in October. The indexes for professional services and for hospital and related services increased 0.3 and 0.4 percent, respectively.

The index for recreation was unchanged in October. A 0.6 percent decline in the index for video and audio products and services was largely offset by increases in the indexes for admissions, for sporting goods, and for recreational reading materials.

The index for education and communication increased 0.2 percent in October. Educational costs rose 0.6 percent, while the index for communication declined 0.2 percent. Within the former group, the index for college textbooks rose 1.0 percent. Within the communication group, the index for telephone services rose 0.7 percent, largely reflecting a 2.2 percent increase in charges for long distance land-line telephone services. This advance was more than offset by a 3.3 percent decline in the index for information technology, hardware, and services. The index for internet services and electronic information providers declined 6.6 percent.

The index for other goods and services rose 0.3 percent in October. The index for miscellaneous personal services rose 0.5 percent, reflecting increases in the indexes for legal services and for financial services --each up 0.8 percent.

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 0.7 percent in October.

Consumer Price Index data for November are scheduled for release on Friday, December 15, 2006, at 8:30 A.M. (EST).

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.