United States yearbook - 1982 (1)

Section 15
Prices
This section presents indexes of producer and consumer prices, actual prices for selected commodities,
and budgets for urban families and retired couples. The primary sources of these data are
monthly publications of the Department of Labor, Bureau of Labor Statistics, which include: M onthly
Labor Review; Consum er Price index. D etailed R eport; Consum er P rices: Energy and Food; and
Producer Prices a n d P rice indexes. The Bureau of Economic Analysis of the Department of Commerce
is the source for the gross national product (GNP) implicit price deflator figures; see table
747. The Department of Agriculture’s Economic Research Service (ERS) produces indexes of
prices received and prices paid by farmers; see section 24. The single year 1967 has been the
standard reference base period for most general-purpose index numbers prepared by Federal
agencies; however, this standard reference base period will be changed to the year 1977.
The Bureau of Labor Statistics (BLS) prepares monthly indexes of producer prices for a large
selection of commodities, and monthly indexes of consumer prices for both commodities and services.
Producer price index.— Formerly known as the wholesale price index, this index, dating from
1890, is the oldest continuous statistical series published by BLS. It is designed to measure average
changes in prices of all commodities, at all stages of processing, produced or imported for sale
in primary markets in the U.S.
The index has undergone several revisions (see M onthly Labor Review, February 1962). It is now
based on approximately 3,500 commodity price series instead of the approximately 1,900 included
in the 1947-1960 period and the 900 included for the period prior to 1947. Prices used in constructing
the index are collected from sellers, if possible, and generally apply to the first significant largevolume
commercial transaction for each commodity—i.e., the manufacturer’s or other producer’s
selling price, the importer's selling price, or the selling price on an organized exchange or at a central
market.
The weights used in the index represent the total net selling value of commodities produced or
processed in this country, or imported. Values are f.o.b. production point and are exclusive of
excise taxes, interplant transfers, military products, and goods sold directly at retail from producing
establishments. Beginning in January 1976, the weights are values of net shipments of commodities
as derived from the industrial censuses of 1972 and other data. For January 1967-December
1975, weights were based on 1963 shipment values.
Implicit price deflators.—Several measures of the change in prices paid by U.S. consumers are
available. Each of them is constructed differently and behaves differently. Three such measures
are: the im p licit p rice d e fla to r for personal consumption expenditures (PGE) and the chain price
index for PCE, prepared by Bureau of Economic Analysis (BEA) and the consum er price index; prepared
by BLS.
Many of the differences are traceable to the fact that the population groups covered by the BEA
measures are “ persons” as defined in the national income and product accounts, i.e., mainly individuals
and nonprofit Institutions and individuals serving them. The CPI covers all urban consumers.
Weights also differ in each of the three measures. In terms of relative importance, approximately 70
percent of the expenditure components used in constructing the BEA and the CPI are comparable.
CPI measures, are also used in constructing most of the BEA measures for noncomparable PCE
components. All together, almost 95 percent of the weight of the price indexes used in the construction
of the BEA measures is taken from the CPI. See U.S. Bureau of Economic Analysis,
Survey o f Current Business, March 1978 for a detailed reconciliation.
Consumer price Indexes (CPI).—The CPI Is a measure of the average change In prices over
time in a fixed “ market basket" of goods and services purchased by urban wage earners and clerical
workers and by all urban consumers.
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