Wednesday, March 16, 2016

Airline fares edge up in Feb. CPI

Airline fares edged up 0.1 percent in February following a 1.2 percent rise in January 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 index for airline fares ended 2015 with a net decline of 3.0 percent, meaning the increases for the first two months of 2016 erased nearly half of last year's drop.

The calculations of airline fares include an allowance for checked bag fees but the BLS does not include other ancillary charges which continue to rise and represent a larger percentage of airlines' overall revenue.

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.

Airline fares countered the seasonally adjusted all items figure, which declined 0.2 percent in February after remaining unchanged in January. Over the last 12 months, the all items index rose 1.0, a smaller increase than the 1.4-percent change for the 12 months ending in January, the BLS said in its March 16 news release containing the data.

The index for all items less food and energy increased 0.3 percent in February, the same increase as the prior month. The shelter index repeated its January increase of 0.3 percent, with the indexes for rent and for owners' equivalent rent both increasing 0.3 percent, and the index for lodging away from home rising 0.9 percent. The apparel index rose sharply in February, increasing 1.6 percent, its largest increase since February 2009. The medical care index rose 0.5 percent, the same increase as in January, with the index for prescription drugs rising 0.9 percent and the hospital services index advancing 0.5 percent.

The index for motor vehicle insurance increased 0.4 percent in February, the same increase as last month. The index for education rose 0.3 percent. The indexes for new vehicles, used cars and trucks, alcoholic beverages, recreation, and tobacco all increased 0.2 percent in February. The indexes for personal care and for airline fares both edged up 0.1 percent, while the index for household furnishings and operations was unchanged. The communication index was one of the few to decline in February, falling 0.5 percent.

The index for all items less food and energy increased 2.3 percent over the past 12 months, a figure that has been slowly rising since it was 1.7 percent for the 12 months ending May 2015. The index for shelter has risen 3.3 percent over the last year, its largest 12-month increase since the period ending September 2007, and the medical care index has increased 3.5 percent, its largest rise since October 2012, the BLS said in its statement.

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