How BLS Measures Price Change for Used Cars and Trucks in the Consumer Price Index #refinance #auto #loan


#auto prices
#

How BLS Measures Price Change for Used Cars and Trucks in the Consumer Price Index

Leased Cars and Trucks

The weight of Used Cars and Trucks in the Consumer Price Index is determined by spending on used cars and trucks less trade-ins on new and used vehicles and other sales of consumer owned vehicles.

Pricing. The Bureau of Labor Statistics (BLS) does not collect price information on used cars and trucks. All price information for used cars and trucks used in the CPI comes from the N.A.D.A. Official Used Car Guide (NADA). All prices are adjusted for depreciation of the vehicle.

A monthly price relative is calculated for each observation. The price relative is based on a three month moving average of the current and last two months depreciation adjusted prices. So for month t, we are comparing the price (Dt+Dt-1+Dt-2)/3 to the price (Dt-1+Dt-2+Dt-3)/3, where Dt is the depreciation adjusted price for month t.

Sample Selection

The current CPI sample of used cars and trucks was chosen with the J. D. Power Information Network. This is a network of car dealers who report sales of used vehicles to the J. D. Power Company. From the universe of 2 through 7 year old vehicles, a sample of 480 vehicles was chosen.

The CPI sample consists of 480 observations. These observations are replicated in all of the CPI areas (after tax adjustments).

The sample is updated by one model year each September through November. This maintains the same age vehicles over time. If a production model is discontinued, it is replaced by a comparable model. A complete resampling is scheduled every 5 years.

Quality Adjustments

Quality adjustments are made in the CPI for new and used vehicles based on manufacturers costs obtained by the BLS analysts. The quality adjustments that are made to used cars and trucks are the same adjustments that were made to the vehicles when they were new, they just occur in later years. Because the improvements are assumed to have depreciated at the same rate as the vehicle itself, the adjustment amount applied to used cars and trucks is appropriately depreciated.

Issues associated with used cars and trucks

Although the CPI uses the N.A.D.A. Official Used Car Guide to obtain prices, other sources are available. The two most commonly used sources are the Kelley Blue Book and the Black Book. Information on trends in used car and truck prices can be obtained from several other sources.

Manheim Auto Auctions constructs a price index based on sales at their auctions. These are wholesale auto auctions only open to professional buyers. Manheim runs a chain of these auctions and has thousands of vehicles to use as source data. They do not do adjustments for depreciation or quality changes. The index comes out monthly.

Adesa Auto Auctions is another chain of auto auctions. They have various data available on used car pricing trends but don t have a specific price index available.

Automotive News is a trade publication covering the Automobile industry. It sometimes has information on used car and truck pricing trends

Additional information

Additional information on the Consumer Price Index can be found in the BLS Handbook of Methods. chapter 17, “The Consumer Price Index,” Bulletin 2490 (1997). The current version of this chapter is also available on the BLS Internet site at www.bls.gov/opub/hom/homch17_a.htm or you may call the Information and Analysis Section of the CPI at 202-691-7000.

Last Modified Date: March 13, 2015

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How BLS Measures Price Change for Used Cars and Trucks in the Consumer Price Index #online #auto #insurance #quotes


#auto prices
#

How BLS Measures Price Change for Used Cars and Trucks in the Consumer Price Index

Leased Cars and Trucks

The weight of Used Cars and Trucks in the Consumer Price Index is determined by spending on used cars and trucks less trade-ins on new and used vehicles and other sales of consumer owned vehicles.

Pricing. The Bureau of Labor Statistics (BLS) does not collect price information on used cars and trucks. All price information for used cars and trucks used in the CPI comes from the N.A.D.A. Official Used Car Guide (NADA). All prices are adjusted for depreciation of the vehicle.

A monthly price relative is calculated for each observation. The price relative is based on a three month moving average of the current and last two months depreciation adjusted prices. So for month t, we are comparing the price (Dt+Dt-1+Dt-2)/3 to the price (Dt-1+Dt-2+Dt-3)/3, where Dt is the depreciation adjusted price for month t.

Sample Selection

The current CPI sample of used cars and trucks was chosen with the J. D. Power Information Network. This is a network of car dealers who report sales of used vehicles to the J. D. Power Company. From the universe of 2 through 7 year old vehicles, a sample of 480 vehicles was chosen.

The CPI sample consists of 480 observations. These observations are replicated in all of the CPI areas (after tax adjustments).

The sample is updated by one model year each September through November. This maintains the same age vehicles over time. If a production model is discontinued, it is replaced by a comparable model. A complete resampling is scheduled every 5 years.

Quality Adjustments

Quality adjustments are made in the CPI for new and used vehicles based on manufacturers costs obtained by the BLS analysts. The quality adjustments that are made to used cars and trucks are the same adjustments that were made to the vehicles when they were new, they just occur in later years. Because the improvements are assumed to have depreciated at the same rate as the vehicle itself, the adjustment amount applied to used cars and trucks is appropriately depreciated.

Issues associated with used cars and trucks

Although the CPI uses the N.A.D.A. Official Used Car Guide to obtain prices, other sources are available. The two most commonly used sources are the Kelley Blue Book and the Black Book. Information on trends in used car and truck prices can be obtained from several other sources.

Manheim Auto Auctions constructs a price index based on sales at their auctions. These are wholesale auto auctions only open to professional buyers. Manheim runs a chain of these auctions and has thousands of vehicles to use as source data. They do not do adjustments for depreciation or quality changes. The index comes out monthly.

Adesa Auto Auctions is another chain of auto auctions. They have various data available on used car pricing trends but don t have a specific price index available.

Automotive News is a trade publication covering the Automobile industry. It sometimes has information on used car and truck pricing trends

Additional information

Additional information on the Consumer Price Index can be found in the BLS Handbook of Methods. chapter 17, “The Consumer Price Index,” Bulletin 2490 (1997). The current version of this chapter is also available on the BLS Internet site at www.bls.gov/opub/hom/homch17_a.htm or you may call the Information and Analysis Section of the CPI at 202-691-7000.

Last Modified Date: March 13, 2015

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Free Excel Gantt Charting and Project Planning #burndown #chart,s-curve #chart,physical #progress,,timeline,launchexcel,power #tips,gantt #chart,project #schedule,cost #performance #index,cpi,schedule #performance #index,spi,progress #meansurement,gantt #roadmap,project #roadmap,schedule #logic,schedule #template,predecessor,successor,logical #link,labour #demand,project


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The firm may or may not have glass sheets of this specific size. The objective is to identify glass sheets, from the inventory on hand, which match customer specifications. If there is no exact match, then one must be able to obtain all inventory items which have the same Thk (MM) and CAT as the customer specified dimensions but the Length and thickness should be more than equal to the customer specified dimensions. The length and width can then be trimmed to match the exact customer dimensions. Furthermore, the result returned should:

  1. List only the Top 30 glass sheets available in inventory; and
  2. List those Top 30 glass sheets in ascending order of wastage (wastage caused when the glass sheet is trimmed to match the customer specified dimensions)

You may refer to my solution in this workbook. I have shared two solutions – one using Excel formulas and the other using Power Query a.k.a. Get and Transform in Excel 2016. Please read the Comments in cells F1, J9 and J16 of the “Solutions” worksheet. The difference between the 2 solutions is:

  1. Formula driven solution This is in range J10:AM14 of the Solutions worksheet. This is a semi dynamic solution (as compared to the Power Query solution). To get the models in ascending order of wastage, one will have to create an Area column in the base data and sort that column in ascending order.
  2. Power Query solution – This is in range J17:AM21 of the Solutions worksheet. This is a dynamic solution. Just change the customer specified dimensions in range G2:J2 of the Data and Query worksheet. Thereafter just right click on any cell in the range below and select refresh.

Posted by Ashish Mathur on November 2, 2016

Here is a simple four column dataset

A simple Pivot Table (with a slicer) created from this dataset looks like this

The objective is to determine the Top 3 users of each week for each slicer selection. Unfortunately, there is no way to sort multiple columns of a Pivot Table all at once. Once may either sort by the Grand Total column or by the individual week wise columns. Since we do not want to sort by the Grand Total column, the only way out is to sort the individual week wise columns. The expected result should look like this:

I have solved this problem by using CUBE formulas. You may refer to my solution in this workbook .

Posted by Ashish Mathur on September 20, 2016

Here is a small sample of a Project matrix which shows tasks to be accomplished for various projects. There can only be upto 6 tasks per project.

From these two tables, one may want to generate another table showing which employees can be assigned to which project (only those employees should be assigned to a project who can complete all tasks). So the ideal solution is to create another column (8th column) in the Project matrix table above which should have a drop down (Data Data Validation) for every project showing which employees are competent for that project.

Here’s an illustration :

Assuming that the Project matrix is in range A1:G4 (headers are in row 1)

  1. In cell H2 (for Project1), the drop down should show Jane, Lynda, Paddy and Tom. Mary should not appear there because she cannot perform one of the 3 tasks required to complete the project i.e. Gardener.
  2. In cell H3 (for Project2), the drop down should show Lynda, Paddy and Tom. Jane and Mary should not appear there because they cannot perform the Digging and Engineering tasks respectively.

The solution is dynamic for the following:

  1. Projects added to the Project matrix Table; and
  2. Tasks added (upto 6 only) or edited in the Project matric Table; and
  3. Employees added to the Competency matrix Table; and
  4. Tasks added to the Competency matrix Table

I have solved this problem by using:

  1. Power Query; and
  2. Formulas in Data Data Validation.

You may download my solution workbook from here or here .

The objective is to generate the numeric code for text code of any length entered in a certain cell. For example, a user will type a certain text code, say ABEJ and the expected result should be 1250. For JABF, the result should be 0126. The text entry and text length are both user determined.

With ABEJ, typed in cell D2, enter this array formula in cell E2

This formula can now be copied down for generating the numeric code for all text codes entered in column D.

Posted by Ashish Mathur on January 28, 2016

Assume a simple two column dataset with dates in column A and numbers in column B. The dates in column A are from January 1, 2013 to December 31, 2016 and numbers in column B are for the period January 1, 2013 to December 31, 2015 (there are no numbers for January 1, 2016 to December 31, 2016).

The objective is to “Compute an average for each day of calendar year 2016. The average should be for the occurrence of that day in the previous 3 years”. Here’s an example:

1. January 1, 2016 was a Friday (the first Friday of 2016) and is in cell A1097
2. In cell B1097, the average should be computed as: Average of the “First Friday of each of the previous 3 years”
3. January 8, 2016 was a Friday (the second Friday of 2016) and is in cell A1104
4. In cell B1104, the average should be computed as: Average of the “Second Friday of each of the previous 3 years”

I have solved this problem with the help of the PowerPivot. You may refer to my solution in this workbook .

Posted by Ashish Mathur on January 17, 2016

Given this dataset, one may want answers to the following questions:

1. Of all those passengers who originated their journey (City of Origin) from Chandigarh, how many terminated their journey (City of destination) in New Delhi via different modes of transport; and
2. Of all those passengers who terminated their journey (City of destination) in Jammu, how many arrived in Amritsar (City of Origin) via different modes of transport; and
3. Of all those passengers who travelled by Bus, how many travelled from City A (City of Origin) to City X,Y,Z (City of destination)

While one can analyse/slice and dice this data using Pivot Tables, one cannot visualize this data very clearly (even after creating a Pivot chart). I have attempted to visualize this data using a software called PowerBI desktop (a free for download and use Business Intelligence software from Microsoft which rolls all of Excel’s BI tools into 1 – PowerPivot, Power Query, Power Map and Power View).

You may download the source Excel workbook and the Power BI desktop workbook from this link .

You may also watch a short video here:

Posted by Ashish Mathur on November 13, 2015

In this workbook. I have Sales data of an E-Commerce Company for 3 months. The typical columns in the base data are:

1. Order Date/Time
2. City to which orders were shipped
3. Order Number
4. Payment Type i.e. Cash on delivery, Net Banking, EMI’s
5. Order Status i.e. Delivered or cancelled
6. SKU’s which the ordered items fall into
7. Products which the ordered SKU’s fall into
8. Categories which the ordered products fall into

Given this simple tabular representation, one may want to analyse and visualize this dataset from multiple perspectives based on user selections, such as

“What was the revenue earned from the Top 5products in the A100 category in April for orders shipped to New Delhi ?”

In this query framed above, the end user should have the leeway to select any/all of the underlined facets. So one can either choose revenue earned or Number of orders. Likewise, one can either select Top 5 products or Top 15 products/Top 5 SKU’s etc.

With relative ease, one should also be able to “Perform an affiliate analysis” showing which categories are ordered together (to study affiliations). Please review this post for an independent discussion on “Affinity Analysis”.

Furthermore, one should be able to perform a free form timeline search such as – “I would like to study growth in Total revenue of March 2-8 2015 over Feb 1-4 2015”

You may download the workbook from the link shared above.

You may watch similar videos showcasing the capabilities of Business Intelligence in MS Excel:

Here’s a video showing the capabilities of this Sales data model

You may also watch this short video to see how I visualized the revenue flow from Categories to Shipping cities during different Order periods using Custom visuals available in PowerBI desktop.

Please feel free to download the PowerBI desktop workbook of the video shown above from here .

For a detailed overview of Sankey diagrams (a Custom visual available in PowerBI desktop), you may refer to my Blog article here .

Another great Custom visual (Sand Dance) which allows data discovery has been shown at this link. At that link, you will also be able to see how I queried the underlying dataset using “Natural Language”.


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  • How BLS Measures Price Change for New Vehicles in the Consumer Price Index #auto #parts #warehouse


    #used auto prices
    #

    How BLS Measures Price Change for New Vehicles in the Consumer Price Index

    The New Vehicle index, a component of the private transportation index, is included in the transportation group of the Consumer Price Index (CPI). Together with the index for used vehicles, it makes up the new and used motor vehicles index. The new vehicle index is published on a monthly basis for the U.S. and the four regions for which CPI data are published.

    Leased Cars and Trucks

    Selection and Identifying Characteristics Priced

    Information from the Telephone Point-of-Purchase Survey (TPOPS) is used to select the dealerships surveyed for the new vehicle index. All new vehicles sold for consumer use are eligible for selection. A disaggregating process based on dollar volume sales is utilized to select the unique make, nameplate, and model to be priced for the index. Each vehicle is described in detail by specifications including make, nameplate, model, engine, transmission, doors and options.

    Estimated Transaction Price and Price Adjustments

    The price used in the index is an estimated transaction price based on sales for the model over the past 30 days. Prices are collected for the base price, destination charge, options, dealer preparation charges and applicable taxes. Averages are then estimated (based on respondent feedback) to adjust the price for markups, dealer concession or discounts, and consumer rebates.

    Finance Charges are Excluded

    Finance charges are excluded from the Consumer Price Index and any incentives associated with low-interest financing are excluded from the discount or rebate amount. (1)

    Model Year Change-Over and Quality Adjustments

    Model year change-over, when the new model replaces the old model occur in the index each year. The substitution to the new model is done when the dollar sales of the new model are 50 percent or more of the total sales for the vehicle over the past 30 days. While new models are most often introduced in the fall; they can be introduced anytime during the year, and are generally are reflected in the CPI beginning in September and continuing through February.

    Quality adjustments are based on resource cost provided by manufacturers in categories such as: reliability, durability, safety, fuel economy, maneuverability, speed, acceleration/deceleration, carrying capacity, and comfort or convenience. Adjustments are also made when equipment is added or deleted from the tracked model. Adjustments are not made for switches in gasoline content due to mandated air quality requirements. (2)

    For additional details please see Guidelines for Quality Adjustments of New Vehicles Prices. http://stats.bls.gov/cpi/cpiautoqaguide.pdf

    Reports on Quality Changes Each year, the BLS publishes a report on the quality changes to new models. The report is based on the Producer Price Index. It provides the average model year changes in invoice price and a retail equivalent price, as well as the estimated value of quality changes. These press releases are available at http://stats.bls.gov/ppi/motorvehicles.htm

    Why the PPI and CPI New Vehicle Indexes May Show Different Movements

    • PPI captures the price from manufacturer to dealer, while CPI captures the price from dealer to consumer, so a trend toward increasing or decreasing dealer profits may cause some differences in the indexes.
    • There may be a lag in price changes from the manufacturer being passed on to the consumer.
    • The pricing date for the PPI is on one specific day in the middle of the month. While the CPI covers the entire month and based on estimated transaction prices over the past 30 days. A possible lag in price change may appear. For example, the PPI September index may use the price as of September 14, while the CPI September index will estimate a transaction price based on sales over the past 30 days prior the day pricing. A new discount announced on September 10 would show up in the September PPI but may miss most sales used in the September CPI.
    • Prices of imported cars may have different movement than domestically produced cars (exchange rate, high demand for some models, etc.). Prices for these vehicles affect the CPI but not PPI.
    • Model year changeover for PPI shows up almost entirely in October, but the CPI spreads this change over several months.
    • Changes in low financing rate programs are captured in PPI but not CPI.
    • Quality adjustment for emissions is captured in the PPI but not CPI.
    • CPI resamples 25 percent of the vehicles each year, while PPI does a complete resample every 5 years, so the mix of vehicles may be different.
    • Changes in sales taxes and other taxes on cars would cause the CPI to change but would not affect the PPI.
    • Some dealer incentives may not be passed on to consumers. For additional details, please see “Price Measure of New Vehicles: A Comparison” which was originally published in the July 2008 Monthly Labor Review. See http://stats.bls.gov/opub/mlr/2008/07/art2full.pdf

    Other sources of information on new vehicle prices

    The CPI publishes monthly price indexes for purchases of new vehicles, but does not publish averages prices of new vehicles. A source for averages price data would be the Bureau of Economic Analysis (BEA). (3)

    Other useful websites for new vehicle information are Ward’s Automotive, Edmunds and Kelly Blue Book.

    Footnotes

    (1) Monthly Labor Review, “Changing the Item Structure of the Consumer Price Index,” Out of scope items, available at http://stats.bls.gov/opub/mlr/1996/12/art3full.pdf

    (2) CPI Detailed Report, “Treatment of Mandated Pollution Control Measures in the CPI,” (September 1998).

    (3) Instructions for access to BEA data:

    • 1. Go to BEA’s website: www.bea.gov;
    • 2. Click on ‘Gross Domestic Product’ (under the National section)
    • 3. Scroll across the page to ‘Supplemental estimates’
    • 4 Click on ‘Underlying detail tables’ (1st item)
    • 5. Click on ‘Begin using the data’
    • 6. Click on ‘7 – Motor vehicle output’
    • 7. Click on ‘Table 7.2.5S’
    • 8. Scroll down to line 40 which begins the average expenditure per car section.

    Additional information

    Additional information on the Consumer Price Index can be found in the BLS Handbook of Methods. chapter 17, “The Consumer Price Index,” Bulletin 2490 (1997). The current version of this chapter is also available on the BLS Internet site http://stats.bls.gov/opub/hom/homch17_a.htm or you may call the Information and Analysis Section of the CPI at 202-691-7000.

    Last Modified Date: April 20, 2015

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    How BLS Measures Price Change for New Vehicles in the Consumer Price Index


    #used auto prices
    #

    How BLS Measures Price Change for New Vehicles in the Consumer Price Index

    The New Vehicle index, a component of the private transportation index, is included in the transportation group of the Consumer Price Index (CPI). Together with the index for used vehicles, it makes up the new and used motor vehicles index. The new vehicle index is published on a monthly basis for the U.S. and the four regions for which CPI data are published.

    Leased Cars and Trucks

    Selection and Identifying Characteristics Priced

    Information from the Telephone Point-of-Purchase Survey (TPOPS) is used to select the dealerships surveyed for the new vehicle index. All new vehicles sold for consumer use are eligible for selection. A disaggregating process based on dollar volume sales is utilized to select the unique make, nameplate, and model to be priced for the index. Each vehicle is described in detail by specifications including make, nameplate, model, engine, transmission, doors and options.

    Estimated Transaction Price and Price Adjustments

    The price used in the index is an estimated transaction price based on sales for the model over the past 30 days. Prices are collected for the base price, destination charge, options, dealer preparation charges and applicable taxes. Averages are then estimated (based on respondent feedback) to adjust the price for markups, dealer concession or discounts, and consumer rebates.

    Finance Charges are Excluded

    Finance charges are excluded from the Consumer Price Index and any incentives associated with low-interest financing are excluded from the discount or rebate amount. (1)

    Model Year Change-Over and Quality Adjustments

    Model year change-over, when the new model replaces the old model occur in the index each year. The substitution to the new model is done when the dollar sales of the new model are 50 percent or more of the total sales for the vehicle over the past 30 days. While new models are most often introduced in the fall; they can be introduced anytime during the year, and are generally are reflected in the CPI beginning in September and continuing through February.

    Quality adjustments are based on resource cost provided by manufacturers in categories such as: reliability, durability, safety, fuel economy, maneuverability, speed, acceleration/deceleration, carrying capacity, and comfort or convenience. Adjustments are also made when equipment is added or deleted from the tracked model. Adjustments are not made for switches in gasoline content due to mandated air quality requirements. (2)

    For additional details please see Guidelines for Quality Adjustments of New Vehicles Prices. http://stats.bls.gov/cpi/cpiautoqaguide.pdf

    Reports on Quality Changes Each year, the BLS publishes a report on the quality changes to new models. The report is based on the Producer Price Index. It provides the average model year changes in invoice price and a retail equivalent price, as well as the estimated value of quality changes. These press releases are available at http://stats.bls.gov/ppi/motorvehicles.htm

    Why the PPI and CPI New Vehicle Indexes May Show Different Movements

    • PPI captures the price from manufacturer to dealer, while CPI captures the price from dealer to consumer, so a trend toward increasing or decreasing dealer profits may cause some differences in the indexes.
    • There may be a lag in price changes from the manufacturer being passed on to the consumer.
    • The pricing date for the PPI is on one specific day in the middle of the month. While the CPI covers the entire month and based on estimated transaction prices over the past 30 days. A possible lag in price change may appear. For example, the PPI September index may use the price as of September 14, while the CPI September index will estimate a transaction price based on sales over the past 30 days prior the day pricing. A new discount announced on September 10 would show up in the September PPI but may miss most sales used in the September CPI.
    • Prices of imported cars may have different movement than domestically produced cars (exchange rate, high demand for some models, etc.). Prices for these vehicles affect the CPI but not PPI.
    • Model year changeover for PPI shows up almost entirely in October, but the CPI spreads this change over several months.
    • Changes in low financing rate programs are captured in PPI but not CPI.
    • Quality adjustment for emissions is captured in the PPI but not CPI.
    • CPI resamples 25 percent of the vehicles each year, while PPI does a complete resample every 5 years, so the mix of vehicles may be different.
    • Changes in sales taxes and other taxes on cars would cause the CPI to change but would not affect the PPI.
    • Some dealer incentives may not be passed on to consumers. For additional details, please see “Price Measure of New Vehicles: A Comparison” which was originally published in the July 2008 Monthly Labor Review. See http://stats.bls.gov/opub/mlr/2008/07/art2full.pdf

    Other sources of information on new vehicle prices

    The CPI publishes monthly price indexes for purchases of new vehicles, but does not publish averages prices of new vehicles. A source for averages price data would be the Bureau of Economic Analysis (BEA). (3)

    Other useful websites for new vehicle information are Ward’s Automotive, Edmunds and Kelly Blue Book.

    Footnotes

    (1) Monthly Labor Review, “Changing the Item Structure of the Consumer Price Index,” Out of scope items, available at http://stats.bls.gov/opub/mlr/1996/12/art3full.pdf

    (2) CPI Detailed Report, “Treatment of Mandated Pollution Control Measures in the CPI,” (September 1998).

    (3) Instructions for access to BEA data:

    • 1. Go to BEA’s website: www.bea.gov;
    • 2. Click on ‘Gross Domestic Product’ (under the National section)
    • 3. Scroll across the page to ‘Supplemental estimates’
    • 4 Click on ‘Underlying detail tables’ (1st item)
    • 5. Click on ‘Begin using the data’
    • 6. Click on ‘7 – Motor vehicle output’
    • 7. Click on ‘Table 7.2.5S’
    • 8. Scroll down to line 40 which begins the average expenditure per car section.

    Additional information

    Additional information on the Consumer Price Index can be found in the BLS Handbook of Methods. chapter 17, “The Consumer Price Index,” Bulletin 2490 (1997). The current version of this chapter is also available on the BLS Internet site http://stats.bls.gov/opub/hom/homch17_a.htm or you may call the Information and Analysis Section of the CPI at 202-691-7000.

    Last Modified Date: April 20, 2015

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