MNI INTERVIEW: US Apr CPI Misses 80% of Hospital Sample Prices

--Some Inflation Data Could Be Revised When Normalcy Returns: BLS Official

By Brooke Migdon

     WASHINGTON (MNI) - U.S. inflation figures released Tuesday lacked 80% of

the sample for hospital visits, Bureau of Labor Statistics officials told MNI,

highlighting the challenges of data collection during Covid-19.

     The CPI's Commodities and Services Pricing Survey -- covering everything

outside of rent -- typically has an uncollected price rate of 12%-15%, BLS

Assistant Commissioner for Consumer Prices and Price Indexes Robert Cage said in

an interview. That rate jumped to 34% in April, he said. If price information

continues to be unavailable in large quantities, the BLS may revisit the data

once "close to normal operations" have resumed, he said.

     The 20% of sample prices for hospital visits and other medical care items

were used as a stand-in to impute the other uncollected figures. While hospitals

are a clear example of challenges, that category didn't even break the top 10

for items with the largest share of missing data, trailing physician services

and sports tickets.

     "We held back on a lot of the medical care respondents because of the fact

that they were inundated with the pandemic," Consumer Price Index Field Director

Ursula Oliver told MNI. Data collectors in March and April were discouraged from

contacting hospitals or grocery stores on the frontlines of the coronavirus

outbreak, Cage said, in line with a BLS policy to avoid "undue burden on

respondents."

     --PROXIES

     Personal visits that make up 65% of the CPI's commodities and services

pricing survey were suspended in March and price information has since been

collected mostly through phone calls and web scraping, Oliver said. Personal

visits fell to 40% in March and neared zero in April, according to Cage.

     Data collectors can "proxy what we think the prices would have been" for a

number of items by substituting prices collected in a similar geographic region

and major group, Cage said. Unlike other countries, the BLS does not impute for

price changes of a missing item outside of its item category.

     The cost of a hospital visit, accounting for just over 2% of the total CPI

basket, rose by 0.5% in April after increasing 0.4% in March. Prices in that

category fell 0.1% in February.

     Hospitals through April reported instances of price gouging during the

pandemic and medical supplies and personal protective equipment were purchased

at prices much higher than usual.

     --BACK IN TIME

     Portions of other items like food away from home also went uncollected in

April, even though delivery services and limited menus were offered by many

restaurants.

     The BLS could "go back in time" and change the way it imputed the period

where the share of collected data was smaller than normal, Cage said. The

imputed numbers could be revised using better information obtained following the

coronavirus crisis.

     Still, Cage said the BLS is not currently considering restructuring or

revising the CPI basket in the near-term due to disruptions in data collection

and doing so would be a "knee-jerk reaction."

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

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