Midwest Information office

Internet: www.bls.gov/ro5/	FOR RELEASE:
GENERAL INFORMATION: (312) 353-1880	7:30 A.M. CT
MEDIA CONTACT: Paul LaPorte	Tuesday, September 16, 2008
(312) 353-1138

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Consumer Price Index Chicago-Gary-Kenosha, IL-IN-WI CMSA August 2008

The Chicago-Gary-Kenosha Consumer Price Index (CPI-U) fell 0.7 percent in August, the first monthly decline in Chicago area retail prices since last December, according to a report issued today by the U.S. Department of Labor’s Bureau of Labor Statistics.  On an annual basis, August 2007-08, retail prices in the Chicago area were up 4.9 percent.  This annual gain exceeded the 2.6 percent average increase recorded over the previous three twelve-month periods ending in August.  The August 2008 Chicago-Gary-Kenosha Consumer Price Index for All Urban Consumers (CPI-U) stood at 215.971 (1982-84=100).

Regional Commissioner Jay A. Mousa noted that a decline in the gasoline index coupled with decreases in the indexes for utility (piped) gas service and electricity were responsible for most of the 0.7 percent drop in the all items index.  If the effects of these three main energy categories were factored out (all items less energy), the Chicago area all items index increased 0.2 percent in August.

Among other major consumer expenditure categories, prices for apparel, food and beverages, education and communication, other goods and services, and recreation were higher in August.  Costs for shelter and medical care were lower.

The transportation component declined 2.5 percent in August mostly due to a 5.6 percent drop in prices at the gasoline pumps.  This was the first monthly drop in Chicago area gasoline prices since February.  Gasoline prices are up 31.2 percent thus far in 2008 and 33.9 percent higher compared to last August.  Overall transportation costs were up 13.0 percent over the year.  In the previous annual period, August 2006-07, transportation costs fell 1.0 percent.

The housing component declined 1.6 percent in August 2008.  A 14.5 percent drop in the utility (piped) gas service index was responsible for over two-thirds of this decline.  Indexes for shelter (-0.4 percent), electricity (-1.8 percent), and household furnishings and operations (-0.8 percent) were also lower over the month and responsible for the remainder of the decline.  Despite their monthly declines, three of these indexes were still higher over the year: utility (piped) gas service, up 53.3 percent; electricity, up 1.4 percent; and household furnishings and operations, up 0.9 percent.  Shelter costs were nearly unchanged over the year.  Housing costs in general were up 2.7 percent from August a year ago, not as much as the 5.2 percent annual increase in the previous 12-month period ended in August 2007.

The food and beverages component rose 0.9 percent from July-August.  Grocery food prices (food at home index), restaurant meals and cafeteria purchases (food away from home index), and alcoholic beverage prices were all higher in August.  Both the food at home index and food away from home index increased 0.9 percent from July-August.  Alcoholic beverage prices were up 0.2 percent over the month.  All three of these food and beverage subcategories posted annual increases greater than or equal to 6.0 percent: food at home, up 6.6 percent; food away from home, up 6.0 percent; and alcoholic beverages, up 6.8 percent. Overall food and beverage prices rose 6.3 percent on average over the year, nearly double the 3.2 percent annual increase in the previous 12-month period ended in August 2007.

The education and communication component rose 1.6 percent over the month.  While a seasonal change in this component is common, the August 2008 increase was below the 2.0 percent average increase in the previous two years.  For the year, education and communication costs were up 3.7 percent, more than the 3.3 average increase in the previous two August-August periods.

Apparel prices rose 3.9 percent in August.  Apparel prices typically fluctuate in August: over the past 10 years August changes ranged from a decline of 0.2 percent to an increase of 11.9 percent.  For the year, apparel prices were down 2.0 percent.  This decline is representative of a long-term trend: since August 1998, the price of apparel in the Chicago area has declined 24.9 percent.

The medical care component declined 0.4 percent in August, however on an annual basis, medical care costs were up 4.3 percent.  This annual increase was in-line with the 4.0 percent average annual increase during the previous three 12-month periods.

The recreation component, which includes items such as televisions and admissions increased 0.2 percent over the month and increased 4.1 percent over the year.  In the previous 12-month period, recreation costs declined 1.3 percent.

The other goods and services component increased 0.6 percent over the month and was up 4.0 percent over the year.  This annual increase was ahead of the 1.3 percent average annual increase experienced over the prior three years.

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Scheduled release date for the September 2008 CPI: Thursday, October 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.

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Last Modified Date: September 16, 2008