Airline fares continue to decline in Nov. CPI

Airline fares continued their decline in November, dropping 1.3 percent after a 2.2 percent drop in October, according to the latest Consumer Price Index for All Urban Consumers (CPI-U) issued by the Bureau of Labor Statistics (BLS), U.S. Department of Labor.

Bureau of Labor Statistics logo, consumer price index CPINovember's decline means the index has declined in four of the last five months. In October, fares dropped 2.2 percent, offsetting September's 0.4 percent increase. Fares dropped 0.1 percent in August and 4.9 percent in July. Over the last 12 months, the all items index rose 1.6 percent before seasonal adjustment.

The decline ran counter to the overall CPI-U, which was up 0.2 percent for the month on a seasonally adjusted basis from the October figures, according to the BLS's Dec. 15 news release that contained the statistics.

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.

The shelter and gasoline indexes continued to rise in November, and were again the main reasons for the seasonally adjusted all items increase. The shelter index advanced 0.3 percent in November, while the gasoline index increased 2.7 percent.

The food index was unchanged in November, as the index for food at home fell 0.1 percent, its seventh consecutive decline. The energy index increased 1.2 percent, although gasoline was the only major energy component index to increase over the month.

The index for all items less food and energy rose 0.2 percent in November after rising 0.1 percent in October. The shelter index accounted for most of the increase, but the indexes for motor vehicle insurance, education, communication, and used cars and trucks also rose. The medical care index was unchanged over the month. Several indexes declined in November, including apparel, household furnishings and operations, airline fares, and new vehicles.

The all items index rose 1.7 percent for the 12 months ending November; the 12-month all items increase has been rising since it was 0.8 percent in July. The index for all items less food and energy rose 2.1 percent for the 12 months ending November, and the energy index increased 1.1 percent. In contrast, the food index declined 0.4 percent over the last 12 months, the BLS said in its statement.

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