June 2007 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 June, before seasonal adjustment, the Bureau of Labor Statistics of the U.S. Department of Labor reported today. The June level of 208.352 (1982-84=100) was 2.7 percent higher than in June 2006.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 0.1 percent in June prior to seasonal adjustment. The June level of 203.906 (1982-84=100) was 2.7 percent higher than in June 2006.

The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 0.2 percent in June on a not seasonally adjusted basis. The June level of 120.221 (December 1999=100) was 2.3 percent higher than in June 2006. Please note that the indexes for the post-2005 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 June, following a 0.7 percent increase in May. The index for energy, which had increased sharply in each of the preceding three months, declined 0.5 percent in June. The index for petroleum-based energy decreased 0.9 percent and the index for energy services fell 0.1 percent. The food index rose 0.5 percent in June with grocery store food prices up 0.6 percent. The index for all items less food and energy advanced 0.2 percent in June, following a 0.1 percent rise in May. A larger increase in the index for shelter and an upturn in the index for new and used vehicles were responsible for the larger advance.

Consumer prices increased at a seasonally adjusted annual rate (SAAR) of 5.2 percent in the second quarter after advancing at a 4.7 percent rate in the first three months of 2007. This brings the year-to-date annual rate to 5.0 percent and compares with an increase of 2.5 percent in all of 2006. The index for energy, which rose 2.9 percent in all of 2006, advanced at a 27.8 percent SAAR in the first half of 2007 and accounted for about 48 percent of the advance in the overall CPI-U during that period. Petroleum-based energy costs increased at a 48.3 percent annual rate and charges for energy services rose at a 5.5 percent annual rate. The food index rose at a 6.2 percent SAAR in the first half of 2007 and contributed about 17 percent to the overall CPI-U increase in the first six months. Grocery store food prices increased at a 8.0 percent annual rate in the first half of 2007, reflecting acceleration over the last year in each of the six major groups. These increases ranged from annual rates of 14.8 percent in the index for dairy products to 5.5 percent in the index for other food at home.

The CPI-U excluding food and energy advanced at a 2.3 percent SAAR in the second quarter, the same rate as in the first three months of 2007. The advance at a 2.3 percent SAAR for the first half of 2007 compares with a 2.6 percent rise in all of 2006. The deceleration largely reflects a smaller increase in the index for shelter and a downturn in the index for apparel. Shelter costs, which rose 4.2 percent in all of 2006, have risen at a 3.4 percent annual rate in the first half of 2007. The index for apparel, which registered in first annual increase in 2006 since 1997, has declined at an annual rate of 2.9 percent thus far in 2007. The annual rates for selected groups for the last seven and one-half years are shown below.

Percentage change 12 months SAAR 6 ended in December mos. ended in June 2000 2001 2002 2003 2004 2005 2006 2007

The food and beverages index rose 0.5 percent in June. The index for food at home, which rose 0.4 percent in May, increased 0.6 percent in June. The index for dairy products increased 3.2 percent, accounting for over half of the June food at home advance. Milk prices rose 3.5 percent and have risen 9.9 percent since the beginning of the year. The index for fruits and vegetables declined for the second consecutive month--down 1.1 percent in June. The indexes for fresh vegetables and for fresh fruits declined 2.7 and 0.7 percent, respectively, while the index for processed fruits and vegetables increased 1.4 percent. The index for meats, poultry, fish, and eggs increased 0.5 percent. The indexes for pork and for beef increased 0.5 and 0.2 percent, respectively. Poultry prices rose 2.1 percent. Through the first six months of 2007, beef and pork prices have each risen 5.2 percent and poultry prices, 6.5 percent. The indexes for cereal and bakery products and for other food at home each increased 0.7 percent. The index for nonalcoholic beverages rose 0.3 percent. The other two components of the food and beverages index--food away from home and alcoholic beverages--increased 0.3 and 0.4 percent, respectively.

The index for housing increased 0.3 percent in June, following increases of 0.2 percent in each of the preceding three months. The index for shelter rose 0.4 percent, following an increase of 0.2 percent in May. Within shelter, the index for rent rose 0.3 percent; the index for owners' equivalent rent, 0.2 percent; and the index for lodging away from home, 2.5 percent. The index for household energy increased 0.1 percent as a 2.5 percent increase in the index for fuel oil was partially offset by decreases in the indexes for natural gas and for electricity--each down 0.1 percent. (Prior to seasonal adjustment, charges for electricity rose 6.9 percent, reflecting in part the switch to seasonal rates in some areas.) The index for household furnishings and operations increased 0.1 percent in June.

The transportation index, which had risen sharply in each of the preceding three months, declined 0.2 percent in June, reflecting a downturn in the index for motor fuels. The index for gasoline prices, which had increased 28.0 percent during the previous three months, declined 1.1 percent in June. (Prior to seasonal adjustment, gasoline prices fell 1.9 percent from their peak level recorded in May.) The index for new vehicles was virtually unchanged. The index for used cars and trucks increased 0.4 percent. During the last 12 months new vehicle prices have declined 1.0 percent and prices for used cars and trucks, 4.5 percent. The index for public transportation rose 0.8 percent in June, reflecting a 0.9 percent increase in the index for airline fares. (Prior to seasonal adjustment, airline fares advanced 2.8 percent.)

The index for apparel declined for the fourth consecutive month, down 0.6 percent in June. (Prior to seasonal adjustment, apparel prices decreased 3.5 percent. Prices for women's and girls' apparel registered the largest decline--down 5.8 percent.)

Medical care costs rose 0.2 percent in June and are 4.0 percent higher than a year ago. The index for medical care commodities-- prescription drugs, nonprescription drugs, and medical supplies--was virtually unchanged. The index for medical care services rose 0.3 percent. The indexes for professional services and for hospital and related services increased 0.2 and 0.3 percent, respectively.

The index for recreation was virtually unchanged in June. Increases in the indexes for pets, pet products and services and for video and audio- -up 0.6 and 0.2 percent, respectively--were offset by decreases in most other recreation categories. The index for admissions to movies, theaters, concerts, and sporting events declined 1.1 percent.

The index for education and communication, which advanced 0.6 percent in May, was virtually unchanged in June. Educational costs rose 0.2 percent and the index for communication costs decreased 0.2 percent. Within the communication group, the index for information and information processing declined 0.3 percent; the indexes for personal computers and peripheral equipment and for internet services and electronic information providers declined 2.7 and 1.2 percent, respectively.

The index for other goods and services increased 0.3 percent in May. The index for tobacco and smoking products rose 0.5 percent and has increased 5.9 percent during the last 12 months. The index for miscellaneous personal services rose 0.3 percent, reflecting a 1.1 percent increase in the index for financial services.

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 0.1 percent in June.

Consumer Price Index data for July are scheduled for release on Wednesday, August 15, 2007, at 8:30 A.M. (EDT).

Consumer Price Index Levels to Three Decimal Places

Effective with the January 2007 release of the Consumer Price Index (CPI), the Bureau of Labor Statistics began computing percent changes based upon three decimal place indexes rather than one decimal place indexes. This change applied 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, CPI index values were displayed to three decimal places in all paper and electronic publications. As in the past, percent changes were rounded and displayed to one decimal place.

The change in procedure addressed a rounding issue that resulted in published percent changes that were 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 were particularly important when percent changes were very small. Publishing the index values to three decimal places, and using these values to compute percent changes, essentially eliminated the possibility of rounding differences. This change only affected the presentation of the index data. Index values 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 was introduced. The levels of the indexes are affected only in that they are published to three decimal places rather than one place. Official CPI data previously published were not be revised.

Note on Sampling Error in the Consumer Price Index

The CPI is a statistical estimate that is subject to sampling error because it is based upon a sample of retail prices and not the complete universe of all prices. BLS calculates and publishes estimates of the 1- month, 2-month, 6-month and 12-month percent change standard errors annually, for the CPI-U. These standard error estimates can be used to construct confidence intervals for hypothesis testing. For example, the estimated standard error of the 1 month percent change is 0.06 percent for the U.S. All Items Consumer Price Index. This means that if we repeatedly sample from the universe of all retail prices using the same methodology, and estimate a percentage change for each sample, then 95% of these estimates would be within 0.12 percent of the 1 month percentage change based on all retail prices. For a 1-month change of 0.2 percent in the All Items CPI for All Urban Consumers, we are 95 percent confident that the actual percent change based on all retail prices would fall between 0.08 and 0.32 percent. For the latest data, including information on how to use the estimates of standard error, see "Variance Estimates for Changes in the Consumer Price Index, January 2005- December 2005 in the CPI Detailed Report, February 2006. These data are available on the CPI home page (http://www.bls.gov/cpi), using the following link http://www.bls.gov/cpi/cpivar2006.pdf

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