Topic Archives: U.S. Statistical System

Catching up on Recent BLS Activities

July 28, 2022BLS Commissioner

At BLS, we highly value feedback that can help us improve our economic statistics. Three groups regularly advise us on serving the needs of data users: the BLS Data Users Advisory Committee, the BLS Technical Advisory Committee, and the Federal Economic Statistics Advisory Committee.

I cannot overstate the value of these committees. They have given us truly wonderful ideas. If you want to join these meetings, they are open to the public. You can learn more about future meetings directly from the committee links provided above. I welcome and encourage you to attend.

As the Commissioner of BLS, my role at these meetings is to give an overview of all the new and exciting things happening at BLS. I want to share these updates directly with you, too.

Budgets for Fiscal Years 2022 and 2023

Let’s start with the budgets for fiscal years (FY) 2022 and 2023. For full information on the FY 2022 budget, please see the Department of Labor FY 2022 budget page, which has information on the budget for BLS and other agencies within the Department. You also can see the FY 2023 proposed budget, released on March 28, 2022.

In addition to funding our existing programs, the President’s FY 2023 proposed budget requests additional funds for several BLS initiatives.

We are requesting $14.5 million to continue developing a new National Longitudinal Survey of Youth cohort. We are developing plans for a new cohort called the National Longitudinal Survey of Youth 2026 (NLSY26). The NLSY26 will build upon our experience and analysis of two ongoing earlier cohorts:

NLSY79: A sample of 12,686 people who were born in the years 1957–64. The survey began in 1979, when sample members were ages 14–22. BLS has followed this cohort of late baby boomers for more than 40 years, recording their lives from their teens into their 50s and early 60s.
NLSY97: A sample of 8,984 people who were born in the years 1980–84. The survey began in 1997, when sample members were ages 12–17. BLS has followed this cohort for more than 20 years, and sample members are now in their mid-30s to early 40s.

As in previous National Longitudinal Surveys cohorts, BLS plans to ask NLSY26 cohort members a core set of questions on employment, training, education, income, assets, marital status, fertility, health, and occupational and geographic mobility. We also plan to administer cognitive and noncognitive assessments. We are considering other topics as we consult with stakeholders and subject matter experts in a range of fields.

The FY 2023 budget request for BLS also includes the following:

$11.9 million to produce data to support the U.S. Census Bureau’s Supplemental Poverty Measure, to research the nature and construction of a consumption-based poverty measure, and to research a chained Consumer Price Index for low-income households.
$9.6 million to publish monthly Job Openings and Labor Turnover Survey data earlier and expand the data.
$1.1 million to restore agricultural industries to the Occupational Employment and Wage Statistics program.
$1 million to enhance the Consumer Price Index by reducing the current lag in the publication of the final chained CPI by 3 months.

Expanding Our Data

Moving beyond the budget, one topic that’s getting a lot of attention lately is inflation. We’ve been measuring and reporting on inflation at BLS for over a century, and we are always looking for ways to improve our measurement. The National Academy of Sciences, Committee on National Statistics, recently completed a study that focuses on ways to improve the Consumer Price Index. The report provided 37 consensus recommendations on how BLS can adapt to the rapidly changing digital landscape to improve CPI methods. BLS staff are now reviewing the report and developing an action plan based on the committee’s recommendations. You can read my blog about the report and the full report itself.

BLS recently began publishing monthly and quarterly labor force measures for the American Indian and Alaska Native population on February 4, 2022. We have these data back to 2000. Previously, we published data for American Indians and Alaska Natives only annually. You can learn more about the new data in one of my February blog posts.

We now are evaluating whether we can begin publishing monthly and quarterly labor force data for the Native Hawaiian and Pacific Islander population and for detailed Asian groups. The populations of Native Hawaiians and Pacific Islanders and detailed Asian groups are relatively small, so we need to evaluate whether the Current Population Survey sample size is large enough to produce reliable monthly estimates for these groups. We currently publish annual data for Native Hawaiians and Pacific Islanders and detailed Asian groups in our report on Labor Force Characteristics by Race and Ethnicity.

Updates for Other Programs

I mentioned the National Longitudinal Surveys already, but the program is also doing other great work! In November 2021 we released data for the NLSY97 COVID-19 Supplement. We collected these data from February to May 2021. The survey asked questions about how the pandemic affected employment, health, and childcare. See our brief analysis of some of the COVID-19 data.

We’re also exploring how to measure the value of household production. BLS contracted with a vendor to consider how to use data from the American Time Use Survey on home production and impute the data to consumer units in the Consumer Expenditure Surveys. We expect to receive the recommendations by the end of the fiscal year.

Also in our Consumer Expenditure Surveys, we conducted an online survey test from November 2021 through January 2022 that will help us analyze alternative methods of collecting data. Response rates for most surveys have been declining for years. The COVID-19 pandemic also has made in-person interviewing less feasible. We are currently analyzing the results of the test to learn how we might reverse the trend of declining response rates and be ready for future events that might disrupt data collection.

Finally, we revamped the BLS Productivity program’s web space in April 2022. Information on labor productivity and total factor productivity is now available in a single cohesive and intuitive space. The new web space eliminates redundant material, improves consistency, and includes new material to fill information gaps. It truly enhances the customer experience!

I hope you find these updates useful and that they improve your experience with BLS data. We are always looking for opportunities to improve your experience with our gold standard economic statistics. Be on the lookout for more updates and improvements as we continuously adapt to meet your needs!

Tags: BLS budget, BLS products and services, COVID-19, CPI, Labor market trends, Longitudinal, Pandemic, Statistics awareness

A Blueprint for Modernizing the Consumer Price Index

May 24, 2022BLS Commissioner

At BLS, we never stop improving. We highly value any input from our data users, technical advisors, and other experts that helps us improve our high quality economic statistics. On May 3, 2022, we welcomed the latest evaluation of one of our statistical programs from the National Academy of Sciences, Committee on National Statistics (CNSTAT): Modernizing the Consumer Price Index for the 21st Century.

As we first reported in December 2019, CNSTAT convened an expert panel to study the Consumer Price Index (CPI). In our update in August 2021, we shared the panel membership and described the public meetings where the panel gathered information for its report. Now that the panel has completed its report, we share our plans to address their recommendations:

Adopt an alternative data strategy that significantly expands the use of new data sources and collection methods.
Improve the timeliness and quality of market basket weights in the CPI.
Continue research to enhance and inform the public’s understanding of consumer price change for shelter and medical care.
Calculate income-based CPIs and address methodology limitations.
Collaborate across the federal and international statistical system.

Use Alternative Data Sources

The chapter on modernizing elementary indexes focused on alternative data sources. Using data from sources beyond traditional surveys is a theme throughout the report. The recommendation to develop a household scanner data program would be a long-term strategy to address many challenges of calculating an accurate and timely CPI. BLS agrees with the panel to seek new data sources to improve every aspect of price index calculation: prices, expenditures (including the quantities purchased), quality adjustment, modeling, estimation, and imputation. Doing so will enable BLS to improve and expand the data we produce and provide users the data they need when they need it.

Even before the CNSTAT report, BLS has been busy building a pipeline of alternative data sources and improving our estimation methods for the CPI. Increasing the focus on alternative data should generate a steady flow of new data sources. This focus also will improve our ability to collect data through a variety of methods and give us new opportunities to address quality change. Consistent with our values to provide accessible information, we will keep you informed about new data sources and methods through the BLS website.

Improve Timeliness and Quality of Market Basket Weights

Beginning in January 2023, BLS plans to update market basket weights in the CPI annually, using 1 year of data. This change will immediately improve the timeliness of the market basket. BLS will continue our efforts to collect and process data more quickly to calculate the CPI using the most recent spending information.

BLS uses several data sources to adjust data collected in the Consumer Expenditure Surveys to calculate the CPI market basket weights. BLS will analyze the feasibility of using business data from the Bureau of Economic Analysis to adjust for categories consumers are reluctant to report, such as alcohol and tobacco. BLS plans to research alternative data sources to improve expenditure estimates when information from respondents is missing or aggregated.

BLS continues to believe collecting data directly from consumers is important to achieve our measurement objective. We are conducting research on a Household Cost Index, which requires household-level expenditure estimates to calculate household-specific indexes. As the panel notes, indexes for specific populations also require linking expenditures with information about households. Given current resources, we do not plan to expand our use of data from other sources in the next few years to supplement data collected in the Consumer Expenditure Surveys. In the future, BLS could pursue a household scanner data program to address the concerns the panel raises regarding the Consumer Expenditure Surveys.

Modernize Shelter

BLS is exploring alternative data sources to supplement rents collected in our housing survey and improve imputation of rental equivalence estimates for owner-occupied housing . We will continue to produce research indexes that meet user needs. BLS plans to publish research on a rent index focused on new tenants. Future research will target alternatives to rent data as a proxy for rental equivalence in predominantly owner-occupied areas and alternatives to the rental equivalence approach for high-end properties.

All BLS consumer indexes currently use a rental equivalence approach to target a cost-of-living measurement objective. Research indexes based on occupancy (renter and owner) will provide users with more insight. Some users need indexes for certain populations. As already mentioned, BLS will continue to research a Household Cost Index that uses a payments approach for owner-occupied housing. Some of these research indexes may ultimately be “promoted” to official status.

Modernize Medical Care

BLS uses an indirect method to price health insurance because directly pricing health insurance premiums is difficult. We have confirmed the retained earnings data incorporate rebates and will pursue further improvements to the indirect approach. We are pursuing implementation of claims data for physician’s and hospital outpatient services and will monitor hospital price transparency data as a possible data source in the future. Research comparing the indirect and direct methods is well underway and will be published initially as a research paper.

Calculate Supplemental Population Price Indexes

BLS continues research on producing price indexes by income groups. While BLS recognizes the limited benefit of reweighting the market basket to create indexes for particular population groups, we believe indexes for renters and owners will provide more insight into measuring price change for shelter. BLS will continue to seek cost-effective methods to study household behaviors and seek resources to collect household scanner data linked with demographics.

Collaborate with Other Statistical Organizations

Another theme throughout the report is communication and collaboration among statistical agencies. The panel recommended expanding collaboration, especially in research and data sharing. As the complexity of data sources and methods increases, BLS also needs to communicate with stakeholders to maintain transparency. Our practice is to announce on the BLS website in advance any changes to our data sources or methods. We will continue to share research index results to document the impact of these changes. BLS is looking into new ways of sharing data and improving transparency.

We value our partnerships with other agencies in the federal and international statistical community. In June 2022, we will share the CNSTAT recommendations with the Federal Economic Statistics Advisory Committee and discuss our plans. We will continue to seek out new opportunities to connect and collaborate with colleagues in the government, academic, and private sectors as we improve our statistics. We also will ensure our staff has the skills to innovate the modern methods of the future. In the last few years, BLS developed an in-house Data Science Training Program designed to bring awareness and improve the skills of BLS staff in key areas of data science. This annual program introduces a new cohort of BLS staff to these concepts, with plans to scale for larger cohorts in the future and include more specialized learning streams.

It is an exciting time to produce economic statistics. Their importance is paramount, and the opportunities have expanded to improve their accuracy, relevance, and timeliness. The CNSTAT’s latest report on the CPI is a valuable guide to help us keep improving and continue to produce gold standard data well into the future.

Tags: BLS products and services, Committee on National Statistics, Consumer Price Index, Consumer spending, CPI, Methodology, Owners' equivalent rent, Rent, Shelter, Statistics awareness

Measuring Changes in Shelter Prices in the Consumer Price Index

May 20, 2022BLS Commissioner

Shelter costs are the largest regular expense for most households. That makes them a topic of considerable interest to users of Consumer Price Index (CPI) data. The U.S. city average for shelter increased 5.1 percent from April 2021 to April 2022. Its two main components, owners’ equivalent rent of residences and rent of primary residence, each increased 4.8 over the year. (Lodging away from home is the other component of shelter, and lodging prices rose 19.7 percent from April 2021 to April 2022.)

Consumer Price Index for All Urban Consumers, all items and shelter, January 2012 to April 2022

Editor’s note: Data for this chart are available in the table below.

Because of their large weight in the CPI market basket—nearly a third—the indexes for owners’ equivalent rent and rent can have a large impact on the overall inflation estimate. There is also a lot of misunderstanding about these shelter indexes, and so it is worth taking a few minutes to get a clear understanding of what they measure.

Owners’ equivalent rent is the larger of these two components, at nearly one quarter of the consumer market basket, or weight, in the CPI. It represents the implicit amount an owner of a housing unit would have to pay in rent to live in the unit, assuming it was leased instead of owned. The expenditure weight for owners’ equivalent rent in the CPI is based on a question in the Consumer Expenditure Survey. That question asks homeowners, “If someone were to rent your home today, how much do you think it would rent for monthly, unfurnished and without utilities?” The role of this question can be easily misunderstood by even sophisticated users of BLS data. That has contributed to a common misconception: the mistaken belief that the price observations used for owners’ equivalent rent in the CPI are also from homeowner estimates of their home’s rental value. In fact, the sample of prices used in the owners’ equivalent rent index comes from observations of rent collected in our monthly survey of housing prices, but with utilities and other similar charges removed.

Why don’t we just measure changes in home values in the CPI? It’s because a home isn’t just a consumption item for the owner. It is also an investment, often the largest investment many people will make in their lives. The concept in the CPI—and in the economic statistics programs of most other nations—is to treat owned housing as a capital or investment good, distinct from the shelter service it provides. We treat spending to buy and improve houses and other housing units as investment and not consumption in the CPI. Mortgage interest costs, property taxes, real estate fees, most maintenance, and all improvement costs are part of the cost of the capital good and are also not treated as consumption items. These nonconsumption costs of owned housing are out of scope for the CPI under the cost-of-living framework that guides the index.

Some people have noted that the CPI index for rent (which represents just over 7 percent of the weight of the CPI) is not rising as fast as some other measures, notably those published by firms in the real estate industry. One reason for this is that over 80 percent of rental units in the CPI sample each period have tenants who continue to rent the same unit. Landlords often raise rents when a unit is vacated by a prior tenant and a new tenant moves in. In some cases, the rent paid by tenants with multi-year leases increases periodically—and automatically, by the CPI itself—through an escalation clause in the lease agreement that cites the CPI for this purpose.

Because rents for existing tenants change in line with the terms of leases and rental agreements, and many leases are for 12 months, existing tenants typically do not face price change within the 12-month period of the lease. This is called a “sticky” price. Because of this, the process used to calculate the indexes for rent and owners’ equivalent rent differs from the process used to calculate the rest of the CPI. Most prices are collected either monthly or every 2 months, but rent prices are collected every 6 months. In effect, this means price increases for shelter can sometimes take longer to appear in the CPI than in some other data sources.

We are always working to improve the accuracy of the CPI, and that includes our shelter indexes. We asked for expert opinion from the National Academy of Sciences, Committee on National Statistics, on better ways to measure price change for these important items. The committee recently published their report, “Modernizing the Consumer Price Index for the 21st Century.” The report endorsed the use of owners’ equivalent rent in the CPI and recommended that, “BLS should continue using rental equivalence as the primary approach to estimating the price of housing services for owner-occupied units.”

I will say more about the report from the Committee on National Statistics soon. In the meantime, we will consider all the recommendations of this distinguished group as we plan future improvements to the CPI.

You can read more about shelter in our factsheet for rent and owners’ equivalent rent. We also have more technical details in the Handbook of Methods.

Consumer Price Index for All Urban Consumers, all items and shelter, January 2012 to April 2022
Month	All items	Shelter	Rent of primary residence	Owners’ equivalent rent of residences
Jan 2012	100.000	100.000	100.000	100.000
Feb 2012	100.440	100.205	100.182	100.102
Mar 2012	101.203	100.472	100.332	100.295
Apr 2012	101.509	100.638	100.469	100.465
May 2012	101.390	100.799	100.589	100.560
Jun 2012	101.241	100.999	100.657	100.660
Jul 2012	101.076	101.179	100.929	100.837
Aug 2012	101.639	101.350	101.150	101.097
Sep 2012	102.092	101.511	101.438	101.322
Oct 2012	102.052	101.737	101.937	101.538
Nov 2012	101.569	101.804	102.193	101.735
Dec 2012	101.295	101.922	102.477	101.880
Jan 2013	101.595	102.213	102.711	102.077
Feb 2013	102.427	102.481	102.926	102.249
Mar 2013	102.695	102.720	103.146	102.384
Apr 2013	102.588	102.848	103.209	102.542
May 2013	102.771	103.097	103.432	102.701
Jun 2013	103.017	103.340	103.566	102.888
Jul 2013	103.058	103.554	103.790	103.045
Aug 2013	103.182	103.779	104.187	103.355
Sep 2013	103.302	103.905	104.432	103.570
Oct 2013	103.036	104.053	104.752	103.839
Nov 2013	102.825	104.285	105.038	104.149
Dec 2013	102.816	104.509	105.422	104.415
Jan 2014	103.199	104.852	105.666	104.646
Feb 2014	103.581	105.113	105.828	104.815
Mar 2014	104.248	105.512	106.120	105.056
Apr 2014	104.591	105.696	106.358	105.227
May 2014	104.957	106.036	106.595	105.411
Jun 2014	105.152	106.252	106.832	105.604
Jul 2014	105.111	106.567	107.192	105.844
Aug 2014	104.935	106.787	107.502	106.124
Sep 2014	105.014	106.979	107.871	106.380
Oct 2014	104.751	107.224	108.254	106.667
Nov 2014	104.185	107.399	108.695	106.969
Dec 2014	103.594	107.543	108.987	107.140
Jan 2015	103.107	107.932	109.258	107.403
Feb 2015	103.555	108.247	109.575	107.632
Mar 2015	104.171	108.628	109.862	107.885
Apr 2015	104.383	108.871	110.044	108.142
May 2015	104.915	109.101	110.295	108.353
Jun 2015	105.282	109.454	110.600	108.720
Jul 2015	105.289	109.886	111.011	109.018
Aug 2015	105.140	110.096	111.390	109.325
Sep 2015	104.977	110.379	111.871	109.664
Oct 2015	104.929	110.648	112.306	109.963
Nov 2015	104.708	110.818	112.653	110.260
Dec 2015	104.350	111.000	112.995	110.509
Jan 2016	104.523	111.434	113.305	110.795
Feb 2016	104.609	111.802	113.605	111.031
Mar 2016	105.059	112.101	113.882	111.250
Apr 2016	105.557	112.353	114.148	111.546
May 2016	105.984	112.781	114.482	111.890
Jun 2016	106.332	113.231	114.818	112.249
Jul 2016	106.160	113.510	115.190	112.574
Aug 2016	106.258	113.834	115.599	112.942
Sep 2016	106.513	114.165	116.005	113.367
Oct 2016	106.646	114.543	116.563	113.751
Nov 2016	106.480	114.757	117.024	114.167
Dec 2016	106.515	115.016	117.469	114.458
Jan 2017	107.136	115.389	117.753	114.717
Feb 2017	107.473	115.736	118.042	114.947
Mar 2017	107.560	115.972	118.297	115.127
Apr 2017	107.879	116.233	118.533	115.321
May 2017	107.971	116.546	118.883	115.529
Jun 2017	108.069	116.916	119.246	115.874
Jul 2017	107.995	117.102	119.579	116.186
Aug 2017	108.318	117.589	120.086	116.629
Sep 2017	108.892	117.859	120.392	116.974
Oct 2017	108.823	118.253	120.871	117.386
Nov 2017	108.825	118.386	121.324	117.733
Dec 2017	108.761	118.701	121.803	118.092
Jan 2018	109.354	119.071	122.146	118.391
Feb 2018	109.850	119.356	122.336	118.563
Mar 2018	110.098	119.826	122.571	118.878
Apr 2018	110.536	120.167	122.913	119.194
May 2018	110.996	120.638	123.195	119.468
Jun 2018	111.172	120.877	123.516	119.779
Jul 2018	111.180	121.219	123.917	120.129
Aug 2018	111.242	121.574	124.421	120.514
Sep 2018	111.371	121.734	124.763	120.799
Oct 2018	111.568	122.001	125.188	121.205
Nov 2018	111.194	122.224	125.708	121.633
Dec 2018	110.839	122.500	126.037	121.899
Jan 2019	111.050	122.911	126.340	122.185
Feb 2019	111.520	123.376	126.633	122.505
Mar 2019	112.149	123.869	127.084	122.830
Apr 2019	112.743	124.313	127.536	123.190
May 2019	112.983	124.676	127.790	123.463
Jun 2019	113.005	125.113	128.300	123.861
Jul 2019	113.194	125.442	128.672	124.179
Aug 2019	113.188	125.656	129.073	124.542
Sep 2019	113.277	126.005	129.537	124.906
Oct 2019	113.536	126.081	129.865	125.222
Nov 2019	113.475	126.280	130.307	125.597
Dec 2019	113.372	126.476	130.683	125.894
Jan 2020	113.812	126.982	131.085	126.273
Feb 2020	114.123	127.454	131.392	126.523
Mar 2020	113.875	127.596	131.743	126.785
Apr 2020	113.114	127.559	131.982	126.973
May 2020	113.116	127.851	132.244	127.237
Jun 2020	113.735	128.067	132.431	127.379
Jul 2020	114.310	128.368	132.686	127.653
Aug 2020	114.671	128.532	132.878	127.889
Sep 2020	114.830	128.579	133.058	128.015
Oct 2020	114.878	128.640	133.332	128.347
Nov 2020	114.808	128.704	133.496	128.454
Dec 2020	114.916	128.809	133.658	128.625
Jan 2021	115.405	129.037	133.775	128.810
Feb 2021	116.036	129.321	133.963	129.090
Mar 2021	116.858	129.760	134.148	129.337
Apr 2021	117.819	130.245	134.361	129.564
May 2021	118.763	130.677	134.652	129.920
Jun 2021	119.867	131.372	134.969	130.363
Jul 2021	120.443	131.997	135.215	130.757
Aug 2021	120.692	132.182	135.697	131.151
Sep 2021	121.020	132.641	136.296	131.721
Oct 2021	122.025	133.121	136.932	132.368
Nov 2021	122.625	133.642	137.566	132.989
Dec 2021	123.002	134.131	138.111	133.505
Jan 2022	124.037	134.667	138.812	134.075
Feb 2022	125.170	135.454	139.545	134.649
Mar 2022	126.841	136.244	140.110	135.204
Apr 2022	127.549	136.941	140.835	135.764

Topics: Consumer Spending | Inflation and Prices | U.S. Statistical System

Tags: Consumer Price Index, Consumer spending, CPI, Methodology, Owners' equivalent rent, Rent, Shelter, Statistics awareness

Measuring Consumer Prices for New Vehicles More Accurately

May 9, 2022BLS Commissioner

In May 2020, we announced a new research index designed to improve the way we measure consumer price changes for new vehicles. Part of the Consumer Price Index (CPI) program, the research index uses transaction data on vehicle purchases. BLS obtains the data from J.D. Power. After carefully studying the data, we now plan to implement the new data source into the official CPI, effective with the April 2022 release, which we will publish on May 11, 2022. We also will update Measuring Price Change in the CPI: New vehicles factsheet at that time.

The research index departs from the traditional survey methods and data sources we have used in the CPI. The traditional methods sample vehicle dealers and the makes, models, and features of the vehicles they sell. That’s why we took a very deliberate approach before we incorporated the new data into the official CPI. We discuss details of our methods and research in “A New Vehicles Transaction Price Index: Offsetting the Effects of Price Discrimination and Product Cycle Bias with a Year-Over-Year Index.”

Leading up to March 2020, the movements of the research index for new vehicles were similar to the official index for new vehicles. Since March 2020, the indexes began to diverge, with the research index showing faster price increases that the official index did not reflect.

Editor’s note: Data for this chart are available in the table below.

Since the COVID-19 pandemic began in March 2020, the economy experienced significant disruption. This is especially true of the automobile industry, which saw fluctuations in the supply chain, employment, and consumer demand. Combining these shifts in the economy with the changes in methods represented by the research index made it challenging to assess our results.

While the research index and the official new vehicles index maintained similar trends, the recent divergence between them provided an opportunity to assess the robustness of the two approaches.

We weighed several factors in deciding whether to incorporate the J.D Power data on new vehicle prices into the official CPI. The new data include records of the prices paid during hundreds of thousands of transactions each month. That dwarfs the roughly 500 prices collected using traditional CPI methods. The larger dataset allows us to estimate price changes more precisely. As a result, the research index has a much lower standard error than the official new vehicles index.

Editor’s note: Data for this chart are available in the table below.

Because the research data reflect actual transactions, the shift in consumer preference from cars to other types of vehicles, such as trucks, is built into the data. This differs from the official index, which has maintained a roughly equal weight between cars and trucks.

In addition to the quantitative evaluations, BLS continued to ask for feedback on the research index through our website and by consulting with other statistical agencies. We received positive feedback and no major concerns, and we remain confident the research index is statistically sound. For these reasons, we have decided to incorporate the new data source and methods for new vehicles in the official CPI.

In some ways, the past 2 years have been an unprecedented time for statistical measurement, but in other ways business at BLS has continued as usual. When the COVID-19 pandemic began in March 2020, BLS ceased in-person data collection for the CPI and other programs. We collected more data online, by telephone, and through video. While the pandemic affected data collection, we continue to publish data on schedule. We also continue to assess our methods and seek ways to improve the quality of our data. Improving our methods for collecting price data for new vehicles is another step forward in innovating and improving the CPI.

Comparison of research index and official index for new vehicle prices
Month	Research index	Official index
Jan 2018	100.000	100.000
Feb 2018	100.026	99.871
Mar 2018	99.481	99.817
Apr 2018	99.842	99.370
May 2018	99.583	99.560
Jun 2018	99.499	99.705
Jul 2018	99.841	99.681
Aug 2018	99.942	99.424
Sep 2018	99.917	99.129
Oct 2018	99.886	99.043
Nov 2018	100.072	99.204
Dec 2018	99.471	99.409
Jan 2019	99.969	100.043
Feb 2019	100.295	100.157
Mar 2019	100.182	100.539
Apr 2019	100.487	100.574
May 2019	100.659	100.452
Jun 2019	100.362	100.287
Jul 2019	100.484	100.027
Aug 2019	100.089	99.633
Sep 2019	100.203	99.224
Oct 2019	100.443	99.136
Nov 2019	99.965	99.138
Dec 2019	99.912	99.472
Jan 2020	100.486	100.175
Feb 2020	100.843	100.549
Mar 2020	101.301	100.087
Apr 2020	102.431	100.008
May 2020	102.842	100.154
Jun 2020	103.653	100.076
Jul 2020	104.047	100.549
Aug 2020	104.142	100.284
Sep 2020	103.895	100.249
Oct 2020	103.841	100.653
Nov 2020	103.977	100.726
Dec 2020	103.781	101.425
Jan 2021	104.818	101.620
Feb 2021	105.652	101.714
Mar 2021	106.308	101.582
Apr 2021	107.156	101.971
May 2021	111.189	103.502
Jun 2021	113.656	105.341
Jul 2021	114.795	106.944
Aug 2021	115.205	107.930
Sep 2021	115.942	109.013
Oct 2021	118.107	110.566
Nov 2021	118.980	111.915
Dec 2021	120.336	113.373
Jan 2022	121.230	114.005
Feb 2022	122.481	114.308

Comparison of 12-month standard errors for the research index and official index for new vehicle prices
Month	Research index	Official index
Jan 2019	0.11	0.61
Feb 2019	0.10	0.58
Mar 2019	0.11	0.42
Apr 2019	0.11	0.43
May 2019	0.13	0.43
Jun 2019	0.12	0.46
Jul 2019	0.14	0.43
Aug 2019	0.13	0.42
Sep 2019	0.14	0.42
Oct 2019	0.12	0.45
Nov 2019	0.16	0.46
Dec 2019	0.16	0.40
Jan 2020	0.15	0.41
Feb 2020	0.15	0.38
Mar 2020	0.14	0.33
Apr 2020	0.15	0.36
May 2020	0.13	0.40
Jun 2020	0.13	0.36
Jul 2020	0.15	0.48
Aug 2020	0.14	0.47
Sep 2020	0.13	0.60
Oct 2020	0.13	0.64
Nov 2020	0.12	0.65
Dec 2020	0.12	0.62
Jan 2021	0.13	0.62
Feb 2021	0.13	0.66
Mar 2021	0.12	0.67
Apr 2021	0.11	0.60
May 2021	0.12	0.59
Jun 2021	0.13	0.63
Jul 2021	0.13	0.61
Aug 2021	0.13	0.69
Sep 2021	0.13	0.74
Oct 2021	0.16	0.72
Nov 2021	0.15	0.55
Dec 2021	0.15	0.69
Jan 2022	0.14	0.67
Feb 2022	0.14	0.68

Topics: Consumer Spending | Inflation and Prices | Survey Respondents | U.S. Statistical System

Tags: Cars, Consumer Price Index, COVID-19, CPI, J.D. Power, Methodology, Pandemic, Statistics awareness, Trucks, Vehicles

How Timing and World Events Affect Price Statistics

April 26, 2022BLS Commissioner

Rising prices have certainly been in the news lately, and we have received a lot of questions about BLS price statistics. Some questions, however, are “evergreen.” Even in times of moderate price changes, BLS staff often hear that the Consumer Price Index (CPI) doesn’t reflect an individual’s experience. We address this concern and a wide range of other issues in our Questions and Answers about the CPI:

Q. Whose buying habits does the CPI reflect?

A. The CPI does not necessarily measure your own experience with price change. It is important to understand that BLS bases the market baskets and pricing procedures for the CPI-U and CPI-W populations on the experience of the relevant average household, not of any specific family or individual. For example, if you spend a larger-than-average share of your budget on medical expenses, and medical care costs are increasing more rapidly than the cost of other items in the CPI market basket, your personal rate of inflation may exceed the increase in the CPI. Conversely, if you heat your home with solar energy, and fuel prices are rising more rapidly than other items, you may experience less inflation than the general population does. A national average reflects millions of individual price experiences; it seldom mirrors a particular consumer’s experience.

Beyond the differences in individual spending habits, price statistics are affected by a variety of factors, including world events and the timing of price data collection. To explore these factors, we will look beyond the CPI to all BLS price indexes. We’ll focus on the price of oil and related items. Let’s start with a reminder of what is included in the BLS family of price indexes and look at how oil-related prices changed in March.

The Consumer Price Index measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
- The CPI for gasoline (all types) rose 18.3 percent in March and 48.0 percent over the last 12 months.
- The CPI for energy rose 11.0 percent in March and 32.0 percent over the last 12 months.
The Producer Price Index (PPI) measures the average change over time in the selling prices domestic producers receive for their output.
- The PPI for crude petroleum rose 7.2 percent in March and 62.2 percent over the last 12 months.
- The PPI for petroleum refineries rose 17.0 percent in March and 62.1 percent over the last 12 months.
- The PPI for fuels and lubricants retailing rose 22.7 percent in March and 40.0 percent over the last 12 months.
The Import and Export Price Indexes show changes in prices of nonmilitary goods and services traded between the United States and the rest of the world.
- The Import Price Index for crude petroleum rose 15.6 percent in March and 62.0 percent over the last 12 months.
- The Export Price Index for crude petroleum rose 19.1 percent in March. (This is a new measure, and we haven’t yet tracked it over 12 months.)

National or international events, whether started by Mother Nature or human action, affect the prices businesses and consumers pay for goods and services. We’ve seen this in the past with weather disruptions, such as hurricanes along the Gulf Coast that shut down oil drilling and refining. Current prices may be influenced by the war in Ukraine, the embargo on Russian oil, and other events around the world.

We can see the influence of these events in price changes throughout the production and distribution of oil-related goods and services. BLS estimates the changes in the prices that domestic producers receive through the PPI; this includes petroleum-related industries such as drillers and refiners and the margins on gasoline station sales. Gasoline retailers make money on the margins of their sales—the difference between how much they pay for the fuel they buy from wholesalers and the prices they receive from consumers. Margins for gas stations typically decline when oil prices increase. To learn more, see “As crude oil plunges, retail gasoline margins spike, then retreat.”

Some domestic producers import oil rather than purchase it domestically, and the Import Price Index reflects changes in prices they pay. Some domestic producers also export petroleum-related products, which is captured in Export Price Indexes. Ultimately, consumers purchase gasoline, home heating oil, and other petroleum-based products, and often producers pass price changes on to consumers. Thus, an increase in oil prices can result in higher costs at the pump, more expensive airline fares, and price increases for goods transported by trucks. The CPI reflects these higher prices consumers may face.

The price of oil and related products can change rapidly, adding to the challenges of collecting and publishing timely price statistics. Ideally, BLS would collect prices throughout the month for all goods and services in all price indexes. While that is a long-term goal, it is not simple to implement. Currently, BLS identifies the official “pricing date” for each index, as follows:

We collect prices for the CPI throughout the month, with each outlet (such as a gas station) assigned one of three pricing periods, which roughly correspond to the first 10 days, second 10 days, and third 10 days of the month. Once established, prices are updated each month during the same pricing period.
We collect prices for most items in the PPI as of the Tuesday of the week containing the thirteenth day of the month. This is the case for the petroleum-related items. (Some items in the PPI have prices collected throughout the month.)
We obtain import price data for petroleum from the U.S. Department of Energy. We obtain export price data for petroleum from secondary source market prices. These data represent a weighted average of imported and exported oil throughout the month.

Let’s look at the price of oil over the past few months and how the BLS pricing dates might affect the price indexes.

Daily price per barrel of West Texas Intermediate Crude, January to March 2022

Editor’s note: Data for this chart are available in the table below.

The chart shows the volatility of the oil prices, particularly in March. When the February CPI was released on March 10, West Texas Intermediate Crude Oil prices had already soared from $96 per barrel on the last day of February to over $123 two days before the CPI release. While consumers were feeling the pinch at the pump, this steep rise was not reflected in the February CPI data. Similarly, both the February and March PPI price dates (February 15 and March 15) missed the large run-up in oil prices in the first week of March. The Import Price Index, Export Price Index, and CPI did include the highest prices seen in early March, however.

BLS price indexes represent averages—average selections of goods and services, average weights, and typically average time periods. Over time, these indexes provide an accurate view of price change throughout the economy. But during periods of rapidly changing world events, and corresponding rapid changes in the price of individual commodities (and oil in particular), the index pricing periods may miss unusual highs and lows.

Daily price per barrel of West Texas Intermediate Crude, January to March 2022
Date	Dollars per barrel
Jan 3	$75.99
Jan 4	77.00
Jan 5	77.83
Jan 6	79.47
Jan 7	79.00
Jan 10	78.11
Jan 11	81.17
Jan 12	82.51
Jan 13	81.97
Jan 14	83.82
Jan 18	85.42
Jan 19	86.84
Jan 20	86.29
Jan 21	85.16
Jan 24	84.48
Jan 25	86.61
Jan 26	88.33
Jan 27	87.61
Jan 28	87.67
Jan 31	89.16
Feb 1	88.22
Feb 2	88.16
Feb 3	90.17
Feb 4	92.27
Feb 7	91.25
Feb 8	89.32
Feb 9	89.57
Feb 10	89.83
Feb 11	93.10
Feb 14	95.52
Feb 15	92.07
Feb 16	93.83
Feb 17	91.78
Feb 18	91.26
Feb 22	92.11
Feb 23	92.14
Feb 24	92.77
Feb 25	91.68
Feb 28	96.13
Mar 1	103.66
Mar 2	110.74
Mar 3	107.69
Mar 4	115.77
Mar 7	119.26
Mar 8	123.64
Mar 9	108.81
Mar 10	105.93
Mar 11	109.31
Mar 14	103.22
Mar 15	96.42
Mar 16	94.85
Mar 17	102.97
Mar 18	104.69
Mar 21	112.14
Mar 22	111.03
Mar 23	114.89
Mar 24	114.20
Mar 25	116.20
Mar 28	107.55
Mar 29	104.25
Mar 30	107.81
Mar 31	100.53

Topics: Consumer Spending | Industries | Inflation and Prices | Survey Respondents | U.S. Statistical System

Tags: Consumer Price Index, CPI, Energy, Exports, Gasoline, Imports, Oil, Producer Price Index, Statistics awareness