Friday, April 17, 2015

Airline fares drop slightly in March CPI

Airline fares in March declined for the fourth time in the last five months according to the latest figures on the Consumer Price Index for All Urban Consumers (CPI-U) issued by the Bureau of Labor Statistics, U.S. Department of Labor.

Last month, airline fares dropped 1.7 percent after rising 0.2 percent in February, continuing the index's status as one of several indexes that have shown net decreases over the past year. Energy, used cars and trucks and apparel have also fallen over the previous 12 months. 

The March decrease in airline fares, combined with the changes in other indexes, resulted in a seasonally adjusted CPI-U that was up 0.2 percent from the February figure. Overall, the all items index declined 0.1 percent before seasonal adjustment over the last 12 months, BLS said in its April 17 statement detailing the figures.

The calculations of airline fares include an allowance for checked bag fees but the Bureau of Labor Statistics (BLS) does not include other ancillary charges.

The agency found a certain percentage of passengers checked bags. It applies that percentage to all  incoming quotes during sample rotation and then assigns the appropriate checked bag fee (assuming 1 bag, for either one-way or round-trip, based on the description of the quote). It also applies baggage specs to airlines that do not charge for bags so that if they start to charge in the future, BLS could easily incorporate that price increase.

On a seasonally adjusted basis, the index for all items less food and energy rose 0.2 percent in March, the same amount the index rose in February. Along with the shelter index, a broad array of indexes rose in March, including medical care, used cars and trucks, apparel, new vehicles, household furnishings and operations, and recreation.

Energy prices were also up, though they remain lower than the levels of March 2014. The overall energy index rose 1.1 percent, fuel oil rose 5.9 percent and gasoline 3.9 percent. Compared to a year ago, however, energy overall was down 18.3 and gasoline was almost 30 percent lower. 

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