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 4. INFLATION
(CONSUMER PRICE INDEX)
General Information about the CPI
The Consumer Price Index (CPI) is a measure of the
average change in prices over time for a market basket of goods and
services. These price increases are commonly referred to as "inflation".
The CPI, the most widely used measure of inflation, is based on prices
of food, clothing, shelter, and fuels, transportation fares, charges
for doctors' and dentists' services, drugs, and other goods and services
that people buy for day-to-day living.
Clear Management reminds its clients that CPI is
not a measure of wages. Nonetheless, CPI is an important economic indicator
and many compensation professionals review it during their salary increase
planning.
The data in the table below are "unadjusted
data", revealing the best available information about the prices
consumers actually pay. Unadjusted data are often used for escalation
purposes in collective bargaining contract agreements and pension plans,
for example.
Seasonally adjusted data are also reported by the Bureau of Labor Statistics
(BLS) but are not displayed here. Seasonal adjustments eliminate the
effect of changes that normally occur at the same time every year--such
as price movements resulting from changing climatic conditions, production
cycles, model changeovers, holidays, and sales. Seasonally adjusted
data are subject to revision for up to five years after their original
release. For this reason, BLS advises against the use of these data
in escalation agreements.
Current CPI for All Urban Consumers ("CPI-U")
The Bureau of Labor Statistics reported that for the 12-month period ending June 2011, the CPI-U rose 3.6%. While the gasoline index fell sharply in June, the index for all items less food and energy edged up to 1.6%, its highest level since January 2010. The food index increased 3.7% over the last 12 months while the energy index rose 20.1%
In the Washington-Baltimore-DC region, the Consumer Price Index rose by 3.9% for the 12-month period ending June 2011. 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.
Source: US Department of Labor, Bureau of Labor Statistics.
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Consumer
Price Index For All Urban Consumers
(Not seasonally adjusted)
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Calendar Year
(12-month change as of December in each year, except as noted) |
12 months ended 6/30/11 |
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2003
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2004
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2005
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2006
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2007
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2008
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2009
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2010
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United States
City Average
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1.9%
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3.3%
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3.4%
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2.5%
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4.1%
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0.1%
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2.7% |
1.5% |
3.6% |
Washington-Baltimore,
DC-MD-VA-WV
* |
2.4% |
3.6% |
3.7% |
3.1% |
4.5% |
2.5% |
1.6% |
1.6% |
3.9% |
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Northeast
Urban CT,ME,MA,NH,NY,NJ,PA,RI,VT
|
2.8% |
3.6% |
3.5% |
3.0% |
3.8% |
0.7% |
2.8% |
1.6% |
3.4% |
Midwest
Urban
IL,IN,IA,KS,MI,MN,MO,NE,ND,OH,SD,WI
|
1.7% |
3.0% |
3.2% |
1.7% |
3.8% |
-0.3% |
3.0% |
1.8% |
3.9% |
South Urban
AL,AR,DE,FL,GA,KY,LA,MD,MS,
NC,OK,SC,TN,TX,VA,WV,DC
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1.7% |
3.3% |
3.7% |
2.5% |
4.4% |
0.0% |
2.9% |
1.4% |
3.8% |
West Urban
AK,AZ,CA,CO,HI,ID,MT,NV,NM,
OR,UT,WA,WY
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1.5% |
3.1% |
3.0% |
3.1% |
4.1% |
0.0% |
2.2% |
1.3% |
3.1% |
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San Diego, CA** |
3.7% |
3.7% |
3.7% |
3.4% |
2.3% |
3.9% |
0.0% |
1.3% |
3.1% |
Source: US Department
of Labor, Bureau of Labor Statistics
* As of November of each calendar year, and as of May for 2011.
** Annual data shown for each year.
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