Economics: Consumer Price Index

Consumer Price Index
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Consumer Price Index
Article Summary
U.S Bureau of Labor Statistics, (2016). Consumer Price Index, June 2016. New Release, U.S Department of Labor.
According to a report by the US Bureau of Labor and Statistics released in the year 2016 on the consumer price index, all the urban consumer expenditure index rose by 0.2 in June. This was an adjustment as stipulated on a seasonal basis. Over the last year, all items have seen an increase of a 1.0 percent before the seasonal adjustment. All these have been visible in the second consecutive month whereby the increase in energy and food item indexes has offset a decline of results. The buying habits of consumers, consumer trends and population shifts, substitution of products and changes in the quality of certain products have been the underlying factors effecting the consumer price indexes. I am going to shade light on each of this issues on the basis of consumer price index on the basis of food and energy.
The report further states that the food index declined by a 09.1 percent in June, which was stipulated as compared to the 0.2 percent decrease in May. Majorly, the only indexes to rise in the past 12 months was that of fruits and vegetables at home. The other food items such as bakeries and cereals, meats, fish, eggs and poultry have been on the decrease. Also items such as dairy products have seen a significant decrease. A survey on the other foods whose index at home declined over the past year was done on four of the six major grocery stores. A 1.3 percent decrease was evident in the same period.
Also the report indicated that the energy consumer price index rose at 1.3 percent in its fourth consecutive month. Although other key energy component indexes were in a mixture, while the index for gasoline rose to a 3.3 percent increase in June, compared to the 2.3 percent increase in the month of May. Also before a seasonal adjustment, the prices of gasoline were on a 4.4 percent high as the fuel oil index rose to 3.3 percent in the same month. However the consumer price index for electricity and natural gas saw a decline of 0.5 percent and 1.8 percent respectively. Generally, the energy index has seen a 9.4 percent low over the past 12 months where all its major components have fallen. Gasoline and fuel oil have shown a greater percentage declines of 19.6 percent and 15.4 percent respectively while electricity and natural gas have posted smaller percentages in decrease of both 5.0 percent and 1.8 percent respectively.
What is the Consumer Price Index (CPI)?
Consumer Price Index is an average measure of the change in prices of goods and services over time as purchased by households. From the above statistics, the population group covered is almost 89 percent of the total population in the United States including wage earners, professional, managerial and technical workers group, the self-employed and the unemployed, retirees and other households who are not in the labor force. When the index is calculated, the change in prices of various items in every location is averaged together with weights that represents their essentiality in calculating t...