Friday, May 22, 2015

Airline fares continue to drop in April CPI

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

Last month, airline fares declined 1.3 percent after dropping 1.7 percent in March. Overall, the index for airline fares has dropped 7.5 percent over the past year, continuing the index's status as one of several indexes that have declined over the past year, the BLS said in its May 22 statement detailing the figures. 

The April decrease in airline fares, combined with the changes in other indexes, resulted in a seasonally adjusted CPI-U that was up 0.1 percent from the March figure. The index for all items less food and energy rose 0.3 percent in April and led to the slight increase in the seasonally adjusted all items index.

The calculations of airline fares include an allowance for checked bag fees but the 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 one 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, the BLS could easily incorporate that price increase.

On a seasonally adjusted basis, the index for all items less food and energy rose 0.3 percent in April and led to the slight increase in the seasonally adjusted all items index. The index for shelter rose, as did the indexes for medical care, household furnishings and operations, used cars and trucks, and new vehicles.

The decrease in airline fares helped counter the increases in other indexes, as did a decrease in the indexes for energy, gasoline, natural gas, fuel oil and apparel. The overall index for food was unchanged, with the food at home index declining for the second month in a row, offsetting an increase in the index for food away from home.

Over the past year, the all items index declined 0.2 percent. The decline for the 12 months ending April represented a slightly larger decrease than the 0.1-percent decline for the 12 months ending March. The decline was driven by the energy index, which fell 19.4 percent over the last 12 months, with all the major components declining except electricity, the BLS said.

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