Consumer Price Index, Washington-Baltimore – September 2010 (PDF)

The Consumer Price Index for All Urban Consumers (CPI-U) in the Washington-Baltimore area increased 0.5 percent from July to September, the U.S. Bureau of Labor Statistics reported today. Sheila Watkins, the Bureau’s regional commissioner, noted that higher prices for all items less food and energy (0.7 percent) and food (1.6 percent) more than offset a 2.5-percent decrease in the energy index. The two-month rise in the all items less food and energy index was led by a seasonal increase in apparel prices. (Data in this report are not seasonally adjusted. Accordingly, two-month changes may reflect the impact of seasonal influences.)

Over the last 12 months, the CPI-U rose 1.3 percent. (See chart 1 and table A.) Since September 2009, the all items less food and energy index and the food index increased 1.5 and 1.1 percent, respectively. Energy prices edged down 0.2 percent over the year.

Chart 1. 12-month percent change in CPI for All Urban Consumers (CPI-U), Washington-Baltimore, September 2007 to September 2010 (not seasonally adjusted)

Food

The food index advanced 1.6 percent over the last two months. The increase was due almost entirely to higher prices for food away from home, up 3.3 percent since July—the largest bimonthly advance since the inception of the index in November 1997. Food at home prices inched up 0.1 percent from July to September. Within the food at home group, higher prices for both carbonated drinks and beverage materials including coffee and tea, among others, were partially offset by lower prices for a number of items such as lettuce and salad dressing.

The food index advanced 1.1 percent since September 2009. Prices for food away from home increased 2.5 percent over the year, while those for food at home edged down 0.2 percent.

Energy

The energy index, which includes prices for household and transportation fuels, fell 2.5 percent since July. The decline in the energy index was due to lower prices for utility (piped) gas service (-14.5 percent), gasoline (-1.6 percent), and electricity (-0.9 percent) over the last two months.

The energy index edged down 0.2 percent since September 2009, due entirely to a 6.6-percent decline in electricity prices. Moderating the overall decrease in the energy index were higher prices for gasoline and utility (piped) gas service, up 5.8 and 2.3 percent, respectively.

All items less food and energy

The index for all items less food and energy rose 0.7 percent from July to September. Within all items less food and energy, price increases were led by a seasonal advance in prices for apparel (6.7 percent). Partially offsetting this advance was a decline in recreation prices, which fell 0.9 percent since July.

Over the year, the index for all items less food and energy advanced 1.5 percent. Higher prices for various components including shelter (0.9 percent), particularly owners’ equivalent rent of primary residence (1.2 percent), contributed to the 12-month advance. A 2.0-percent decline in recreation prices helped to moderate the 12-month increase in the all items less food and energy index.

The November 2010 Consumer Price Index for Washington-Baltimore is scheduled to be released on December 15, 2010, at 8:30 a.m. (ET).

Technical Note

The Consumer Price Index (CPI) is a measure of the average change in prices over time in a fixed market basket of goods and services. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) a CPI for All Urban Consumers (CPI-U) which covers approximately 87 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 32 percent of the total population. The CPI-U includes, in addition to wage earners and clerical workers, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and the other goods and services that people buy for day-to-day living. Each month, prices are collected in 87 urban areas across the country from about 4,000 housing units and approximately 25,000 retail establishments—department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments. All taxes directly associated with the purchase and use of items are included in the index.

The index measures price changes from a designated reference date (1982-84) that equals 100.0. An increase of 16.5 percent, for example, is shown as 116.5. This change can also be expressed in dollars as follows: the price of a base period "market basket" of goods and services in the CPI has risen from $10 in 1982-84 to $11.65. For further details see the CPI home page on the Internet at www.bls.gov/cpi and the BLS Handbook of Methods, Chapter 17, The Consumer Price Index, available on the Internet at www.bls.gov/opub/hom/homch17_a.htm.

In calculating the index, price changes for the various items in each location are averaged together with weights that represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. Because the sample size of a local area is smaller, the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index, although their long-term trends are quite similar. NOTE: Area indexes do not measure differences in the level of prices between cities; they only measure the average change in prices for each area since the base period.

The Washington-Baltimore, D.C.-Md.-Va.-W.Va., Consolidated Metropolitan Statistical Area (CMSA) includes the District of Columbia; Baltimore City and the counties of Anne Arundel, Baltimore, Calvert, Carroll, Charles, Frederick, Harford, Howard, Montgomery, Prince George’s, Queen Anne’s, and Washington in Maryland; the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, and Manassas Park and the counties of Arlington, Clarke, Fairfax, Fauquier, King George, Loudoun, Prince William, Rappahannock, Spotsylvania, Stafford, and Warren in Virginia; and the counties of Berkeley and Jefferson in West Virginia.

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