Airline fares up in June CPI but down from June '14

Airline fares, which jumped 5.7 percent in May rose a more modest 2.0 percent in June 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 two-month increase is in stark contrast to the preceding six months, which saw five monthly decreases including a 1.3 percent drop in April and a 1.7 percent decline in March. Overall, however, the index for airline fares remains 5.2 percent lower than it was at the same time last year despite the June increase, the BLS said in its July 17 statement detailing the figures. 

The seasonally adjusted all items figures was up 0.3 percent from the May figure and represented a broad-based with increases in the indexes for gasoline, shelter, and food all contributing to the rise. The food index posted its largest increase since September 2014, partly due to a sharp increase in the price of eggs.

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 0.2 percent in June. Increases in the indexes for shelter, recreation, airline fares, personal care, tobacco, and new vehicles more than offset declines in the indexes for medical care, household furnishings and operations, used cars and trucks, and apparel, the BLS statement said.

The all items index was up 0.1 percent for the 12 months ending with June after being unchanged for the 12 months ending with May. The energy index fell 15.0 percent over the last 12 months, with the gasoline index down 23.3 percent for the year despite rising 3.3 percent in June. The food index increased 1.8 percent over the last year, and the index for all items less food and energy rose 1.8 percent, the BLS said.

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