Aug 24 -- The Bureau of Labor Statistics, Department of Labor, invites comments to OMB by September 25, 2023 regarding the extension of 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.
The sample for ongoing pricing for the Commodities and Services (C&S) portion of the CPI is approximately 34,000 outlets surveyed monthly with 94,000 price quotes per month. The average monthly outlet response rate for ongoing pricing was 81.6% per month over the time period from October 2021 to September 2022. The roughly 18% non-response rate in outlets is due to refusals or outlets being temporarily unavailable for pricing. The response rate at initiation was 75.3% of eligible outlets. During initiation 5.5% of outlets are terminated, either because they refuse to participate (0.5%), are ineligible (4.2%), or cannot be located (0.8%).
Although BLS publishes monthly estimates of the CPI, prices for only about 59% of the total covered expenditures are collected monthly in all sampling areas. Of the 59% priced monthly, 32% reflects rent and owners’ equivalent rent and 27% C&S items.
Regarding just the C&S portion (68%) of the total CPI expenditure weight, 27% is collected monthly and 41% is collected bi-monthly. The monthly priced C&S items include Food at home, Lodging away from home, Tenants insurance, Household fuels, Motor fuels, Motor vehicle parts, equipment and fees, Recreational reading materials, Education, Postage and delivery, Telephone services, and Tobacco products. (Note, in the three largest areas, New York, Chicago, and Los Angeles all sampled items are priced monthly.) Other C&S items are priced bi-monthly ("even" cycle-February, April, June, August, October, and December or "odd" cycle-January, March, May, July, September, and November.)
Some item categories are priced less frequently than our normal monthly or bimonthly cycles. Categories such as College Textbooks, Elementary and High School Books and Supplies, College Tuition and Fixed Fees, Elementary and High School Tuition and Fixed Fees, and Lodging while at School. These categories experience less frequent price change supporting a reduction from monthly and bimonthly data collection while helping to alleviate unnecessary respondent burden and to improve the efficiency of data collection resources.
BLS submission to OMB: https://www.reginfo.gov/public/do/PRAViewICR?ref_nbr=202303-1220-004
Click IC List for information collection instrument, View Supporting Statement for technical documentation. Submit comments through this webpage.
For AEA members wishing to submit comments, "A Primer on How to Respond to Calls for Comment on Federal Data Collections" is available at https://www.aeaweb.org/content/file?id=5806