Midwest Information office

Internet: www.bls.gov/ro5/	FOR RELEASE:
GENERAL INFORMATION: (312) 353-1880	8:30 A.M. ET
MEDIA CONTACT: Paul LaPorte	Thursday, August 14, 2008
(312) 353-1138

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Consumer Price Index
Cincinnati-Hamilton, OH-KY-IN
First Half 2008

Retail prices in the Cincinnati-Hamilton metropolitan area were higher by 2.2 percent in the first half of 2008 compared with the last half of 2007, according to the U.S. Department of Labor’s Bureau of Labor Statistics.  The Cincinnati-Hamilton area Consumer Price Index for All Urban Consumers (CPI-U) stood at 200.054 (1982-84=100) in the first half of 2008, representing a 4.1 percent increase from the first half of 2007.  This was more than the 2.4 percent increase in the previous annual period (first half 2006 to first half 2007), but more in-line with the 4.8 percent gain reported in the 2005-06 period.

According to Jay A. Mousa, regional commissioner for the Bureau’s Chicago regional office, the first half 2008 increase in the Cincinnati area all items CPI-U was attributed to higher prices for gasoline, food, and shelter.  Mousa added that higher costs for recreation, apparel, and medical care also contributed, but to a lesser extent.  The expenditure categories of education and communications and other goods and services increased, although with little impact.

The transportation component gained 5.7 percent in the first half of this year primarily due to higher prices for gasoline.  Prices at the gas pumps were 17.6 percent higher in the first half of 2008 compared with their second half of 2007 average level.  Compared with the first half of 2007, gasoline prices were 25.7 percent higher.  This latest annual price increase was markedly larger when compared to the 1.9 percent increase posted in the first half 2006 to first half 2007 period.  In the last five years, first half 2003 to first half 2008, gasoline prices have increased 117 percent.

The food and beverages component gained 3.1 percent during the first half of 2008.  The food at home index (grocery food items) rose 3.8 percent and the food away from home index (restaurant and cafeteria meals, and vending machine purchases, for example,) rose 2.7 percent.  Alcoholic beverages prices were up 1.6 percent.  On an annual basis, food and beverage prices were 4.9 percent higher.  The food at home index gained 5.6 percent and the food away from home index rose 4.7 percent.  Alcoholic beverages prices climbed 4.3 percent.

During the first half of 2008, the housing component gained 0.5 percent with shelter costs rising 1.0 percent.  The household energy index was unchanged as a 10.7 percent rise in the utility (piped) gas service index was offset by a 4.0 percent decline in the electricity index.  The household furnishings and operations index increased 1.5 percent.  On an annual basis (first half of 2007-first half of 2008), the housing component gained 1.6 percent.  Shelter costs advanced 0.3 percent while the household energy index rose 9.5 percent due to an 8.0 and 10.1 percent increase in the electricity and utility (piped) gas service indexes, respectively.  The household furnishings and operations index increased 1.5 percent from its first half 2007 level.

Recreation costs were up 2.8 percent during the first half of 2008 and were 1.7 percent higher for the year.  Medical care costs rose 1.5 percent during the first six months of 2008.  This latest rise was in-line with the 1.8 percent first half gain reported a year ago.  For the year, medical care costs were up 3.4 percent. Medical care price increases slowed when compared with the 6.2 percent increase reported for the same period in 2007 and 8.3 percent in 2006.

Apparel prices rose 3.1 percent during the first half of the year.  This increase ends an eight-year trend when apparel prices declined during the first six months of the year.  On an annual basis, apparel prices were 14.4 percent higher, the largest annual increase in over a decade.

The education and communications component rose 1.1 percent during the first half of 2008 and was 3.0 percent higher for the year.  The other goods and services component, which includes tobacco and smoking products and personal care items, was up 2.2 percent during the first six months of this year and was 4.3 percent higher on an annual basis.

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Scheduled release date for the second half 2008 CPI: February, 2009

CPI HOTLINE SERVICE PROVIDES LATEST INDEXES 24 HOURS A DAY

The all items CPI-U and CPI-W for the U.S. City Average and the Cincinnati 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 Cincinnati is (513) 684-2349.

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: August 14, 2008