Apr 3 -- The Bureau of Labor Statistics, Department of Labor, invites comments by June 2, 2023 regarding the Consumer Price Index Commodities and Services Survey.
Under the direction of the Secretary of Labor, the Bureau of Labor Statistics (BLS) is directed by law to collect, collate, and report full and complete statistics on the conditions of labor and the products and distribution of the products of the same; the Consumer Price Index (CPI) is one of these statistics. The collection of data from a wide spectrum of retail establishments and government agencies is essential for the timely and accurate calculation of the Commodities and Services (C&S) component of the CPI.
Office of Management and Budget clearance is being sought for the Consumer Price Index (CPI) Commodities and Services Survey. The CPI survey collects about 94,000 prices per month to compute indexes for commodities and services. Approximately two-thirds of price collection in the CPI is done by personal visits of CPI data collectors to brick-and-mortar stores. The remaining data are collected by telephone or on the outlet’s website. In some cases, these data are supplemented by data provided from other sources. The outlets where prices are collected are selected based on data from the CE survey. These outlets may be brick-and-mortar stores or websites (e-commerce); currently, about 8 percent of CPI quotes are collected from outlet websites. Some secondary sources are also used in constructing the CPI sample. For example, data from the U.S. Department of Transportation database are used to construct the sample of fares in the airline fares index.
Because of the complexity, importance and diversity of its universe, the construction of the Consumer Price Index (CPI) requires a complex set of statistical techniques and samples. Conceptually, the potential universe of price quotations for the CPI is the total set of prices, placed in one-to-one correspondence to the total set of purchases of all urban consumers. [In 2020] The sample for ongoing pricing for the Commodities and Services (C&S) portion of the CPI is approximately 35,547 outlets with 89,708 price quotations per month.
The CPI is the only index compiled by the U.S. Government that is designed to measure changes in the purchasing power of the urban consumer's dollar. The CPI is a measure of the average change in prices over time paid by urban consumers for a market basket of goods and services. The CPI is used most widely as a measure of inflation and serves as an indicator of the effectiveness of government economic policy. It is also used as a deflator of other economic series, that is, to adjust other series for price changes and to translate these series into inflation-free dollars. Examples include retail sales, hourly and weekly earnings, and components of the Gross Domestic Product.
A third major use of the CPI is to adjust dollar values. Over 2 million workers are covered by collective bargaining contracts, which provide for increases in wage rates based on increases in the CPI. At least fifteen states have laws that link the adjustment in state minimum wage to the changes in the CPI. In addition, as a result of statutory action, the CPI affects the income of more than 90 million of Americans through cost-of-living adjustments tied to the CPI: over 65 million Social Security beneficiaries and over 38 million Supplemental Nutrition Assistance Program (SNAP) recipients, among other programs. Changes in the CPI also affect the cost of lunches for over 30 million children who eat lunch at school as part of the National School Lunch Program (NSLP). Under the National School Lunch Act and Child Nutrition Act, national average payments for those lunches and breakfasts are adjusted annually by the Secretary of Agriculture based on the change in the CPI series, “Food away from Home.” Many private firms and individuals use the CPI to keep rents, royalties, alimony payments, and child support payments in line with changing prices. Since 1985, the CPI has been used to adjust the Federal income tax structure to prevent inflation-induced tax rate increases.
BLS CPI webpage: https://www.bls.gov/cpi/
Current data collection instruments and technical documentation: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202002-1220-001
Draft data collection instrument and technical documentation requested of BLS by AEAStat.