Rent Error Leads to Revision Of the CPI
A problem involving rents paid for apartments and houses caused the government to slightly understate the rate of consumer price inflation for the first eight months of the year, officials said yesterday.</br></br>The Bureau of Labor Statistics yesterday revised its monthly figures for the consumer price index to correct the problem, raising the inflation rate by 0.1 percentage point, to 3.5 percent on an annual basis, for the January through August period. The rate for the so-called core portion of the index, which excludes volatile food and energy prices, was also lifted by the same amount, to 2.7 percent.</br></br>Katharine G. Abraham, commissioner of labor statistics, said at a press briefing the problem first arose in January 1999 when the agency began using a significantly different sample of housing units to collect rent information. However, she said, the CPI figures for 1999 were not revised because the agency decided the changes were too small to warrant all the problems such a revision would cause for everyone who uses the CPI to adjust benefits, pay, rents and even parts of the tax code for inflation.</br></br>"It would be enormously disruptive for the whole gamut of users of this information" if the 1999 figures had been revised, Abraham said, adding that her agency's guidelines for such matters say "we should not be revising too far back in time."</br></br>The agency will not know until next month, when it has the September price figures, whether the changes announced yesterday will affect next year's cost-of-living increases in Social Security payments, veterans' benefits and federal pensions. Those benefits are raised each January according to the increase in the average level of the CPI in the July through September period from the level in the same three months of the preceding year.