Midwest Information office

Internet: www.bls.gov/ro5/	FOR RELEASE:
GENERAL INFORMATION: (312) 353-1880	7:30 A.M. CT
MEDIA CONTACT: Paul LaPorte	Thursday, August 14, 2008
(312) 353-1138

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Consumer Price Index Midwest Region July 2008

The Consumer Price Index for the Midwest rose 0.5 percent in July, after registering a 0.9 percent increase in June.  The index was up 5.6 percent from July 2007, the U.S. Department of Labor’s Bureau of Labor Statistics reported today.  According to Regional Commissioner Jay A. Mousa, rising energy costs accounted for over one-half of the overall increase.  Energy prices, which include prices for motor and household fuels, were up 2.4 percent in July.  Energy prices have advanced 27.7 percent since July 2007, led by escalating motor fuel costs.  The Midwest CPI for all items less energy was 0.3 percent higher over the month and was up 2.9 percent over the year. 

Reflecting rising costs for household fuels, the housing index increased 0.7 percent.  The fuels and utilities index advanced 3.9 percent as electricity prices increased 1.4 percent and utility (piped) gas service costs climbed 8.8 percent.  Shelter costs were unchanged while prices for household furnishings and operations were up 0.5 percent over the month.  From July 2007 to July 2008, housing costs increased 4.0 percent in the Midwest.  Shelter costs rose 1.6 percent and prices for household fuels and utilities were up 18.4 percent for the year.  Within fuels and utilities, electricity prices rose 6.0 percent over the year, and prices for utility (piped) gas service climbed 40.0 percent, the largest over-the-year increase since October 2005.  Prices for household furnishings and operations rose 2.0 percent over the 12-month period.

The food and beverages index rose 1.0 percent in July with prices for food at home up 1.2 percent and prices for food away from home 0.9 percent higher, the largest one-month increase since monthly publication began in January 1987.  Prices for alcoholic beverages were up 0.3 percent over the month.  From July 2007 to July 2008, prices for food and beverages rose 5.9 percent.  Prices for food at home advanced 6.9 percent, and prices for food away from home rose 5.3 percent since July 2007.  Alcoholic beverages’ prices increased 3.0 percent over the year.

The transportation component also had a major impact on the overall monthly index, increasing 0.6 percent in July, largely attributable to rising motor fuel costs.  Motor fuel prices advanced 0.9 percent.  Prices for new and used motor vehicles were unchanged as new vehicle prices were down 0.2 percent and prices for used cars and trucks registered little movement.  Overall, transportation prices have risen 12.9 percent since July 2007, led by an over-the-year increase of 33.6 percent in motor fuel costs.  Prices for new and used motor vehicles were 0.3 percent higher over the year.

Apparel prices decreased 2.1 percent in July following a 3.5 percent decline in June.  Apparel prices typically decline in June and July as retailers discount spring-summer merchandise.  Apparel prices were 1.6 percent higher from July 2007 to July 2008.

The remaining four major expenditure categories— recreation, education and communication, other goods and services, and medical care—contributed little to the increase in the overall monthly index.  Prices for recreation rose 0.4 percent in July and were up 3.0 percent over the year.  Prices for education and communication were up 0.3 percent for the month and were 3.3 percent higher than July 2007.  Other goods and services prices increased 0.4 percent since June 2008 and advanced 4.2 percent over the year.   Medical care costs registered little or no movement over the month and rose 2.3 percent over the year. 

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 210.071 in July.  A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $210.07 in July 2008.  Because regional CPI data are not adjusted for seasonal price variation, consumers and businesses should be cautious in drawing conclusions about long-term retail price trends from short-term changes in the regional indexes. 

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Scheduled release date for the August 2008 CPI: Tuesday, September 16, 2008

CPI HOTLINE SERVICE PROVIDES LATEST INDEXES 24 HOURS A DAY

The all items CPI-U and CPI-W for the U.S. City Average, the Midwest region, and the Chicago area are available to the public 24 hours a day, 7 days a week through the Bureau’s CPI Hotline service. This recorded message also provides percent changes from the prior period and from a year earlier, as well as the scheduled release date for the next CPI issuance. The Hotline number in Chicago is (312) 353-1880, menu option 2.

BRIEF EXPLANATION OF THE CPI

The Consumer Price Index (CPI) is a measure of the average change in prices over time in a fixed market basket of goods and services. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) a CPI for All Urban Consumers (CPI-U) which covers approximately 87 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 32 percent of the total population. The CPI-U includes, in addition to wage earners and clerical workers, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors’ and dentists’ services, drugs, and the other goods and services that people buy for day-to-day living. Prices are collected in 87 urban areas across the country from about 50,000 housing units and approximately 23,000 retail establishments--department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments. All taxes directly associated with the purchase and use of items are included in the index. Prices of food, fuels, and a few other items are obtained every month in all 87 locations. Prices of most other commodities and services are collected every month in the three largest geographic areas and every other month in other areas. Prices of most goods and services are obtained by personal visits of the Bureau’s trained representatives.

In calculating the index, price changes for the various items in each location are averaged together with weights that represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. Separate indexes are also published by size of city, by region of the country, for cross-classifications of regions and population-size classes, and for 27 local areas. Area indexes do not measure differences in the level of prices among cities; they only measure the average change in prices for each area since the base period.

The index measures price changes from a designated reference date (1982-84) that equals 100.0. An increase of 16.5 percent, for example, is shown as 116.5. This change can also be expressed in dollars as follows: the price of a base period "market basket" of goods and services in the CPI has risen from $10 in 1982-84 to $11.65.

For further details see the CPI home page on the Internet at www.bls.gov/cpi and the BLS Handbook of Methods, Chapter 17, The Consumer Price Index, available on the Internet at www.bls.gov/opub/hom/homch17_a.htm. 

 

Last Modified Date: August 14, 2008