Midwest Information Office

Internet: www.bls.gov/ro5/	FOR RELEASE:
GENERAL INFORMATION: (312) 353-1880	7:30 A.M. CT
MEDIA CONTACT: Paul LaPorte	Friday, August 14, 2009
(312) 353-1138

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CONSUMER PRICE INDEX
MINNEAPOLIS-ST. PAUL, MINN.-WIS. MSA
FIRST HALF 2009

Retail prices in the Minneapolis-St. Paul area were down 1.7 percent in the first half of 2009 compared with their levels in the second half of 2008, according to the U.S. Department of Labor’s Bureau of Labor Statistics. The first half 2009 Minneapolis-St. Paul all items Consumer Price Index for All Urban Consumers (CPI-U) was 206.167 (1982-84=100), representing a 1.0 percent decrease over the first half of 2008.  In the previous annual period, first half 2007 to first half 2008, retail prices in the Twin Cities recorded a 3.8 percent gain.

Regional Commissioner Jay A. Mousa stated that the 1.7 percent decrease in the all items Minneapolis-St. Paul CPI-U during the first half of 2009 was primarily attributed to lower costs for the energy related categories of gasoline and utility (piped) gas service.  Prices for other goods and services and recreation also fell in the first half of the year, but with less impact.  Consumer expenditure categories for medical care, education and communication, and apparel rose during the first half of 2009 while food and beverage prices were nearly unchanged.

Transportation costs fell 9.4 percent during the first half of this year.  Gasoline prices were down 28.2 percent.  Compared with their average during the first six months of 2008, gasoline prices were down 36.9 percent.  In the previous annual period, gasoline prices rose 23.3 percent.  The overall transportation component was 12.6 percent lower in the first half of 2009 compared with its first half average of 2008.

The housing component decreased 1.0 percent during the first half of 2009.  A 29.4 percent decline in the utility (piped) gas service index was a major contributing factor in this decline.  This latest decline in the utility (piped) gas service index compares with a 22.3 percent gain in the first half of 2008.  Elsewhere in the housing component, the electricity index gained 0.6 percent and the household furnishings and operations index rose 2.1 percent in the first half of 2009.  Compared to the first half of 2008, the overall housing component was up a modest 0.2 percent.  Increases in the indexes for shelter (1.5 percent), electricity (5.5 percent), and household furnishings and operations (4.4 percent) were nearly offset by a 35.5 percent decline in the utility (piped) gas service index.

The other goods and services component was down 3.4 percent during the first half of this year and was 6.4 percent below its first half 2008 level. 

Recreation costs declined 1.3 percent during the first half of 2009 and were 0.3 percent lower than a year ago. 

Food and beverage prices were essentially unchanged, increasing 0.1 percent during the first six months of 2009.  The food at home index (grocery food items) fell 0.4 percent and the food away from home index rose 0.8 percent.  Alcoholic beverage prices advanced 1.9 percent.  On an annual basis, food and beverage prices were 3.3 percent higher.  Grocery foods were 3.8 percent more expensive while dining out was 2.5 percent costlier over the year.  Alcoholic beverage prices gained 4.8 percent from their first half of 2008 levels.

Apparel prices were rose 1.1 percent during the first half of 2009.  Compared with their first half 2008 level, apparel prices were down 0.6 percent.  During the previous annual period, apparel prices fell 2.5 percent. 

The education and communications component rose 0.8 percent during the first six months of this year and was 3.0 percent higher for the year. 

The medical care component advanced 3.4 percent during the first six months of 2009.  On an annual basis, medical care costs in the Twin Cities gained 6.2 percent.  This was less than the 4.5 percent increase posted in the first half 2007 to the first half 2008 period.

 

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Minneapolis-St. Paul, Minn.-Wis. Metropolitan Statistical Area (MSA) includes Anoka, Carver, Chisago, Dakota, Hennepin, Isanti, Ramsey, Scott, Sherburne, Washington, and Wright Counties in Minnesota and Pierce and St. Croix Counties in Wisconsin.

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 17, 2009