(September 28 – 16:20 ET) – The United States Bureau of Labor Statistics today revised U.S. CPI data up 0.1% to correct a software error.
ICPI will be revised higher by 0.1% in six of the first eight months of 2000, May and July are revised up 0.2%. Seasonally-adjusted CPI was revised up to 3.5% from 3.4% on the headline, and the core rate was lifted to 2.7% from 2.6%. This move was mostly priced into the market yesterday, when the revision was announced.
The move comes to correct an error recently uncovered in the software used to calculate certain components of the index. Correcting this error increases previously published values for those components and for index series that include those components. The error occurred with the introduction of the new housing sample and calculation procedures beginning in January 1999. The computer estimation system in use beginning in January 1999 created a small understatement of index growth.
The error was first identified in June, when a CPI housing analyst was reviewing the data. The BLS says once it identified the error, it took time to determine its cause, to realize its significance, and to identify the correct solution. Although 1999 CPI is slightly understated as a result of this error, the BLS will not republish figures for those months.
As a result of the error, the BLS says it will undertake a rigorous review of this error in order to identify and correct weaknesses in its processes. It plans to focus on: the procedures for the development and review of requirements for new software applications; the procedures for acceptance testing of these applications; the procedures for the routine monthly review of microdata; and the data collection procedures for obtaining information on the characteristics of individual rental units.
-IE Staff