Philadelphia Area Consumer Price Index: October 2009 (PDF)

Retail prices in the Philadelphia area, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), fell 0.6 percent from August to October, following a 1.0-percent increase in the previous two-month period, the U.S. Bureau of Labor Statistics reported today. While a decrease in the housing index dominated the overall decline in the CPI, five of the eight major categories that comprise the CPI had lower prices over the last two months. (See chart 1.)  Sheila Watkins, the Bureau's regional commissioner, noted that the local CPI inched down 0.1 percent since last October—the sixth consecutive 12-month decrease. Over the year, the core inflation rate, as measured by the all items less food and energy index, rose 2.4 percent. (See table 1.)

Chart 1. 2-month and 12-month percent changes ended October 2009 for the major categories of the CPI-U for the Philadelphia area, not seasonally adjusted

Chart Data

The housing index fell 1.1 percent from August to October due mainly to a 4.6-percent decrease in prices for fuels and utilities. Electricity prices, which normally rise in June as summer rate schedules are introduced, then decline in October, fell 7.0 percent over the last two months but were 0.6 percent higher than their year-ago levels. Utility (piped) gas service prices declined 5.5 percent since August and dropped 21.5 percent since last October—the largest over-the-year decrease since the inception of the index in May 1971. Over the year, prices for fuels and utilities fell 7.1 percent. Prices for both shelter (-0.5 percent) and household furnishings and operations (-0.7 percent) decreased since August. Over the year, shelter prices rose 2.1 percent, while prices for household furnishings and operations fell 1.7 percent. The overall housing index increased 0.4 percent since last October.

The education and communication index fell 1.0 percent since August—the largest two-month decline since an identical decrease in April 2003. Over the year, the education and communication index advanced 2.2 percent.

The food and beverages index declined for the third consecutive bimonthly period, down 1.7 percent since April and 0.4 percent since August. Led by lower prices for chicken, the food at home index (-0.8 percent) was responsible for the recent two-month decline in food and beverages prices. Over the last 12 months, food at home prices fell 3.6 percent. Prices for food away from home were unchanged since August, while prices for alcoholic beverages rose 0.6 percent. Prices rose over the year for both food away from home and alcoholic beverages, up 1.1 and 2.9 percent, respectively. The overall food and beverages index declined 1.2 percent since October 2008.

Both the recreation and medical care indexes edged down 0.2 percent over the last two months. Recreation prices were also 0.2 percent lower since last October, while medical care prices increased 1.8 percent over the year.

The remaining categories had higher prices from August to October. Apparel prices rose 1.2 percent over the last two months, reflecting higher prices for a number of items, including jewelry and boys’apparel. Apparel prices advanced 8.6 percent since last October—the largest 12-month increase since December 2004.

The transportation index edged up 0.2 percent since August; higher prices for new vehicles, used cars and trucks, and motor vehicle insurance led the advance. Lower gasoline prices moderated the two-month advance in transportation prices, down 5.4 percent from August to October and 21.9 percent over the year. The transportation index fell 5.7 percent from its year-ago level.

Dominated by higher cigarette prices, the other goods and services index rose 0.4 percent from August to October. The other goods and services index, which includes tobacco and smoking products, personal care products, personal care services, and miscellaneous personal services such as legal, funeral, and laundry and dry cleaning services, advanced 6.3 percent over the year.

The energy index, which reflects prices for gasoline and household fuels, fell 5.5 percent since August, reflecting a seasonal decrease in electricity prices (-7.0 percent), as well as lower prices for gasoline and utility (piped) gas service (-5.4 and -5.5 percent, respectively). Energy prices were 15.8 percent lower since last October.

The two-month decline in the CPI was due entirely to a 0.9-percent decrease in services index. The commodities index was unchanged from August to October. Since October 2008, services prices rose 1.3 percent, while commodities prices fell 2.5 percent.

The CPI-U for the Philadelphia area stood at 224.787 on the 1982-84=100 reference base, which means that a market basket of goods and services which averaged $100.00 in 1982-84 would have cost $224.79 in October 2009.

The Philadelphia-Wilmington-Atlantic City, Pa.-N.J.-Del.-Md., Consolidated Metropolitan Statistical Area (CMSA), includes Bucks, Chester, Delaware, Montgomery, and Philadelphia Counties in Pennsylvania; Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, and Salem Counties in New Jersey; New Castle County in Delaware; and Cecil County in Maryland.

The relative importance of a component of the CPI is its expenditure or value weight expressed as a percentage of all items within an area. Relative importance ratios show approximately how the index population distributes expenditures when the value weights are collected and represent an estimate of how consumers would distribute their expenditures as prices change over time. Relative importance ratios cannot be used as estimates of current spending patterns or as indicators of changing consumer expenditures in the intervals between weight revisions because consumption patterns are influenced by factors—including income, variations in climate, family size, and availability of new and different kinds of goods and services—other than price change. (See table A.)