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Consumer Price Index

R-HICP Homepage

Background

The Bureau began calculating an index following the European definition of the Harmonized Index of Consumer Prices (HICP) as a research project. Data were initially shared in the Monthly Labor Review article Comparing U.S. and European inflation: the CPI and the HICP published in 2006 and we have continued monthly calculation of the experimental US-HICP since then.

The R-HICP differs from the U.S. Consumer Price Index (CPI) in two major respects. First, the HICP includes the rural population in its scope. Second, and probably more importantly, the HICP excludes owner-occupied housing. To construct the research HICP, the CPI first was expanded to cover the entire (noninstitutional) U.S. population and then was narrowed to remove the owner-occupied housing costs that the HICP excludes from its scope.

Like the Classification of Individual Consumption According to Purpose (COICOP) system, the HICP facilitates international comparisons of price change. The International Labor Comparisons program, originally operated within the Bureau and now at the Conference Board, is a primary user of the indexes. They compile HICP measures from different countries to compare international inflation experiences. Another key user is Eurostat. BLS provides Eurostat with relative importance data for these indexes on a monthly basis.

Limitations

These indexes are calculated outside of the official production system, and are at greater risk of calculation errors than the official CPI indexes. Additionally, they differ from the official indexes in both scope and aggregation, and may not have the same data quality as the official indexes we publish. Customers should be aware of the caveats and limitations of any of these products they consider using.

BLS strives to make these indexes available shortly after CPI release day with the exception of January indexes in even years (when expenditure weights are updated) when they are released with a lag, usually by the end of February. Release of indexes in other months may be delayed due to resource availability and other constraints.

The CPI does not collect prices in rural areas, so the R-HICP-R (Rural) indexes are entirely imputed using price changes in proxy areas. The weights are compiled using BLS Consumer Expenditure data collected in rural areas, but are processed outside of the official weights production system. The R-HICP-T (Total population) indexes use the imputed R-HICP-R indexes as an input.

Where definitional differences exist between U.S. item strata and HICP classes, factors are used to bridge between the two structures. This allocation and imputation procedure is an approximation of direct collection of HICP item categories. Factors are used to calculate HICP classes 03, 05, 09, 11, and 12.

Available data

Indexes are produced for the urban (U), rural (R), and the total (T) populations. Monthly indexes are available from December 1997 for the R-HICP-U and from December 2001 for the R-HICP-R and R-HICP-T. Data are available a few days after the release of the CPI-U. Indexes for all items and all items less food and energy are calculated in addition to the following 12 HICP classes:

      • 01: Food and non-alcoholic beverages

      • 02: Alcoholic beverages and tobacco

      • 03: Clothing and footwear

      • 04: Housing, water, gas, electricity, and other fuels (Note: this excludes owners’ equivalent rent measures, consistent with HICP methodology.)

      • 05: Furnishings, household equipment, and routine maintenance of the house

      • 06: Health

      • 07: Transport

      • 08: Communications

      • 09: Recreation and culture

      • 10: Education

      • 11: Restaurants and hotels

      • 12: Miscellaneous goods and services

Data

HICP data are available from the Conference Board’s HICP webpage and Eurostat’s HICP webpage.

Related articles

Additional information is available in the Comparing U.S. and European inflation: the CPI and the HICP Monthly Labor Review article and on the Eurostat COICOP HICP glossary page or Eurostat’s homepage.

Last Modified Date: July 17, 2020