New vehicle price data to be included in April Consumer Price Index
The US Bureau of Labor Statistics will incorporate an new data from a research index on vehicle purchases into the next Consumer Price Index (CPI) due out 11 May.
The data for April will include records of the prices paid during hundreds of thousands of transactions each month obtain from JD Power datasets as opposed to the traditional survey methods and data sources, using roughly 500 prices collected under traditional CPI methods.
The inclusion of the new data in the monthly CPI comes after over a year of comparing the research index with the previous official index, the two datasets on new vehicles were similar but in March 2020, the indexes began to diverge, with the research index showing faster price increases that the official index did not reflect.
The fact that the reseach data reflects actual transactions allowing for shifts in consumer preferrances to be measured more accurately. Whereas previously cars and trucks were given equal weight in the official index the actual purchases are built into the data.
Because the research index dwarfs the official index in the amount of data the BLS will be able to more precisely estimate price changes with a much lower standard error.