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

The Consumer Price Index for All Urban Consumers (CPI-U) in the Washington-Baltimore area was unchanged from May to July, the U.S. Bureau of Labor Statistics reported today. Sheila Watkins, the Bureau’s regional commissioner, noted that lower prices for food (-0.8 percent) and energy (-0.1 percent) offset a 0.1-percent increase in the all items less food and energy index. The two-month rise in the all items less food and energy index largely reflected higher prices for shelter, particularly owners’ equivalent rent of primary residence. (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 0.8 percent. (See chart 1 and table A.) Since July 2009, the all items less food and energy index and the energy index increased 0.9 and 2.2 percent, respectively. Food prices declined over the year, down 0.4 percent.

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

Food

Food prices fell 0.8 percent since May—the largest bimonthly decrease since November 2000—due entirely to a 2.1 percent decrease in prices for food away from home. Moderating the decrease in the food index were higher prices for food at home, up 0.3 percent. Within the food at home group, prices rose for a number of items including milk and ham; partially offsetting these increases were lower prices for apples and soups, among others.

From July 2009 to July 2010, the index for food declined 0.4 percent. The two components of the food index, food away from home and food at home, had over-the-year decreases of 0.7 percent and 0.2 percent, respectively.

Energy

The energy index inched down 0.1 percent from May to July. The decline in the energy index was dominated by falling prices for gasoline, down 6.6 percent over the last two months. Higher prices for electricity (5.6 percent) and utility (piped) gas service (19.4 percent) helped to moderate the decrease in energy prices.

The energy index increased 2.2 percent since July 2009. In particular, gasoline prices rose 6.0 percent over the year. A 17.7-percent jump in utility (piped) gas service prices also contributed to the over-the-year advance. Moderating these increases were lower prices for electricity, down 4.7 percent since July 2009.

All items less food and energy

The index for all items less food and energy inched up 0.1 percent from May to July. Within all items less food and energy, price increases were led by higher prices for shelter (0.5 percent), particularly owners’ equivalent rent of primary residence (0.6 percent). Partially offsetting these advances was a seasonal decline in prices for apparel, which fell 4.5 percent since May.

Over the year, the index for all items less food and energy rose 0.9 percent. Higher prices for medical care (4.8 percent) and education and communication (3.5 percent), among others, contributed to the 12-month advance. A 4.9-percent decline in prices for household furnishings and operations, along with a 5.3-percent decrease in the apparel index, helped to moderate the 12-month increase in the all items less food and energy index.

The September 2010 Consumer Price Index for Washington-Baltimore is scheduled to be released on October 15, 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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