Consumer Price Index

1. Consumer Price Index • Ray Ballesteros • Miguel Vargas

2. Introduction CPI Reporting What’s in the report? What is the CPI? Data Collection CPI Components Why is it Important? Charts Latest Release Conclusion

3. CPI Reporting • Published By: BLS • Frequency: Monthly • Period Covered: Prior Month • Significance: High • http://stats.bls.gov/news.release/pdf/cpi.pdf

4. What’s in the report • Seasonally adjusted figures • Unadjusted figures • CPI-U • CPI-W • CPI Levels to 3 decimal places

5. What’s the CPI? • The Consumer Price Index is a measure of the average change in prices over time of goods and services purchased by households. • CPI-U– Accounts for all expenditures by urban consumers (87% of population) • CPI-W– Accounts for all expenditures by consumers units with clerical, sales, and craft, service workers, operative or laborers(32%).

6. Data Collection • First 3weeks; Visits and Interviews • 87 Urban Areas • +23,000 Retail Outlets • 80,000 Prices Collected

7. CPI Components • 8 Major Categories Housing 42.1% Transportation 16.9% Food & Bev. 15.4% Medical Care 6.1% Apparel 4% Recreation 5.8% Education & Communication 5.9% Other Goods and Services 3.8%

8. Importance of CPI • Main Measure of Inflation (Purchasing Power) Affects Investments, Pension Plans, Rental Contracts, Wages CPI-U & CPI-W are considered final when released– no revisions

12. Latest Release Unadjusted • CPI-U Increased .9% in March before seasonal adjustments. The March level of 205.325 was 2.8% higher than in March 2006. • CPI-W increased 1% in March Prior to seasonal adjustment. The March level of 20.612 was 2.7% higher than in March 2006.

13. Latest Release Adjusted CPI-W increased .8% to 200.527 in March after seasonal adjustment. • Increase .5% in April to 201.449 after seasonal adjustments • CPI-U Increased .6% to 205.352 in March after seasonal adjustments. • Increased .4% in April to 205.999 after seasonal adjustment

14. Conclusion • Inflationary Pressures Remain