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

The Consumer Price Index for All Urban Consumers (CPI-U) in the Washington-Baltimore area edged up 0.2 percent from March to May, the U.S. Bureau of Labor Statistics reported today. Sheila Watkins, the Bureau’s regional commissioner, attributed the recent advance to increases in the indexes for energy (2.0 percent) and food (0.2 percent); the all items less food and energy index was unchanged over the last two months. The bimonthly advance in the energy index largely reflected higher gasoline prices while the increase in the food index was due entirely to higher prices for food away from home. (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 1.9 percent. (See chart 1 and table A.) Since May 2009, the indexes for energy and all items less food and energy increased 13.2 and 1.2 percent, respectively. Food prices also increased over the year, edging up 0.2 percent.

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

Food

Food prices rose 0.2 percent since March following no change in the previous bimonthly period. Among the two components of the food index, higher prices for food away from home (0.7 percent) were partially offset by lower prices for food at home (-0.3 percent).

From May 2009 to May 2010, the index for food increased 0.2 percent, the first over-the-year increase since July 2009.

Energy

The energy index rose 2.0 percent from March to May—its third consecutive bimonthly increase. The recent advance in energy prices was dominated by higher prices for gasoline, up 4.9 percent over the last two months. Lower prices for utility (piped) gas service and electricity helped to moderate the increase in energy prices, down 5.6 and 0.1 percent, respectively.

The energy index advanced 13.2 percent since May 2009. In particular, gasoline prices jumped 31.1 percent over the year—the latest gain in an index that has not recorded a 12-month decrease since October 2009.

All items less food and energy

The index for all items less food and energy was unchanged from March to May. Within all items less food and energy, price increases were led by shelter (0.5 percent), particularly owners’ equivalent rent of primary residence (0.6 percent). Helping to offset these advances were lower prices for apparel, which fell 4.5 percent since March.

Over the year, the index for all items less food and energy rose 1.2 percent. Higher prices for medical care (4.6 percent) and education and communication (3.1 percent), among others, contributed to the 12-month advance. A 4.6-percent decline in prices for household furnishings and operations (part of the housing index), along with a 5.1-percent decrease in the apparel index, helped to moderate the 12-month increase in the all items less food and energy index.

The July 2010 Consumer Price Index for Washington-Baltimore is scheduled to be released on August 13, 2010, at 8:30 a.m. (EDT).

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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