International Comparisons of Harmonized Indexes of Consumer Prices

By Sincavage, Jessica R. | Monthly Labor Review, February 2007 | Go to article overview

International Comparisons of Harmonized Indexes of Consumer Prices


Sincavage, Jessica R., Monthly Labor Review


In October 2006, the Bureau of Labor Statistics (BLS, the Bureau) introduced a new table to its Web site. The new table, "Harmonized index of consumer prices for selected countries and areas, percent change from same period of previous year, 2003-06," uses the methods of the European Union's Harmonized Index of Consumer Prices (HICP) to compare inflation rates of all G7 countries except Canada? q-he table also displays data for two transnational aggregates, one for the European Union (EU) and the other for the Euro area. (2) The table, which is available at http://www.bls. gov/fls/home.htm, will be updated monthly on the same schedule as the BES Employment Situation news release, which typically is issued on the first Friday of each month. (3) These harmonized indexes provide a better basis for international comparisons of inflation than the national CPI data published by each country.

Background

For many years, the Bureau has produced a monthly table showing the national Consumer Price Indexes (CPI's) for nine countries. The table contains percent changes as the national statistical agencies publish them. (4) Because each country produces its CPI with its own unique methods and concepts, the data presented in the table are not strictly comparable. The Bureau will continue to publish this table, in part because it covers additional countries.

The HICP is an internationally comparable measure of consumer price inflation. (5) The EU's statistical agency, Eurostat, developed the HICP's methods. The EU requires member countries and prospective member countries to produce an HICP. Most EU countries continue to produce their national CPI's for internal and historical purposes. (6) The growth of the EU and the integration of much of the European economy under a single currency necessitated a common measure of inflation among the member countries. Indeed, many EU programs and policies depend on such a measure. The European Central Bank, which manages the euro in the same manner that the Federal Reserve System manages the U.S. dollar, needs a comparable measure of inflation to conduct monetary policy. Also, having a common measure of inflation is needed for meaningful comparisons of countries' growth and productivity across the EU and, in addition, in comparing EU countries with other countries in the world. Eurostat publishes HICP data back to 1996 for each member state as well as aggregate indexes with varying geographical coverage. (7)

HICP for the United States

The Bureau recently published an experimental HICP series for the United States. (8) The most important difference between the U.S. CPI and the HICP is that the latter excludes owner-occupied housing from its scope. CPI methods for owner-occupied housing vary widely and the Europeans could not agree on which to use so they simply excluded this item from the HICP. (9) A second difference is that the HICP refers to the entire national population, whereas the U.S. CPI, the Consumer Price Index for All Urban Consumers (CPIU), measures inflation for the 87 percent of U.S. population who live in urban areas. The Bureau created the experimental HICP for the United States by expanding the U.S. CPI's population coverage to the entire (noninstitutional) population and by excluding owner-occupied housing from its item coverage.

Although some minor differences remain between the experimental U.S. HICP and the European HICP's, the U.S. HICP is more comparable to its counterparts in other countries than the U.S. CPI is to other national CPI's. International comparisons of the HICP's are more meaningful than international comparisons of national CPI's. As the following information shows, the movement of the U.S. HICP has differed from that of the U.S. CPI in the past few years.

Japan

The main series of Japan's CPI that is published monthly (the General Index) includes all households with two or more persons, therefore excluding 1-person households. …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items

Items saved from this article

This article has been saved
Highlights (0)
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

Citations (0)
Some of your citations are legacy items.

Any citation created before July 30, 2012 will labeled as a “Cited page.” New citations will be saved as cited passages, pages or articles.

We also added the ability to view new citations from your projects or the book or article where you created them.

Notes (0)
Bookmarks (0)

You have no saved items from this article

Project items include:
  • Saved book/article
  • Highlights
  • Quotes/citations
  • Notes
  • Bookmarks
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Cited article

International Comparisons of Harmonized Indexes of Consumer Prices
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Author Advanced search

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.