Airline fares continue to climb in CPI

Airline fares, which rose 1.5 percent in October, continued to climb in November 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 rose 1.2 percent in November on the heels of its October increase, the BLS said in its Dec. 15 statement detailing the figures. Despite the two consecutive monthly increases, the index is one of several that have posted net declines in the last twelve months.

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 seasonally adjusted all items figure was unchanged from the October figure. Over the last 12 months, the all items index rose 0.5 percent before seasonal adjustment.

The index for all items less food and energy rose 0.2 percent in November, the same increase as in September and October. In addition to airline fares, the indexes for shelter, medical care, new vehicles, and tobacco were among the indexes that rose in November. In contrast, the indexes for recreation, apparel, household furnishings and operations, and used cars and trucks all declined, the BLS statement said.

The all items index rose 0.5 percent over the last 12 months making it the largest 12 month increase since the 12-month period ending December 2014, according to the BLS. The food index rose 1.3 percent over the span, while the energy index declined 14.7 percent. The index for all items less food and energy rose 2.0 percent, its largest 12-month increase since the 12 months ending May 2014.

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