Airline fares up sharply in May CPI

Airline fares, which declined for the fifth time in six months in April, reversed course in May and rose 5.7 percent  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.

The rise is in stark contrast to the preceding months, which saw a 1.3 percent drop in April and a 1.7 percent decline in March. Overall, however, the index for airline fares remains lower than it was at the same time last year despite the May increase, the BLS said in its June 18 statement detailing the figures. 

The May increase in airline fares, combined with the changes in other indexes including a 4.3 percent increase in energy, resulted in a seasonally adjusted CPI-U that was up 0.4 percent from the April figure. Over the past 12 months, the all items index was unchanged before seasonal adjustment.

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 0.1 percent in May , its smallest increase since December. The index for shelter rose 0.2 percent while the index for medical care increased  0.3 percent and transportation services climbed 0.7 percent.

The overall index for food was unchanged, with the food at home index declining 0.2 percent, the third consecutive monthly decline, offsetting a 0.2 percent increase in the index for food away from home.

The all items index was unchanged for the 12 months ending May after showing a 0.2-percent decline for the 12 months ending April. The energy index fell 16.3 percent over the last 12 months, with the gasoline index down 25.0 percent despite rising in May. The food index increased 1.6 percent over the last year, and the index for all items less food and energy rose 1.7 percent, the BLS said.

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