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 MIDWEST REGION JULY 2009

 

The Consumer Price Index for the Midwest turned down in July, decreasing 0.3 percent, the U.S. Department of Labor’s Bureau of Labor Statistics reported today.  According to Regional Commissioner Jay A. Mousa, lower energy costs, driven by falling prices for motor fuel, accounted for over three-fourths of the movement in the index.  The all items index declined a record 2.5 percent since July 2008—its eighth consecutive over-the-year decrease.    

Energy prices, which include prices for motor fuel and household fuels, were 3.5 percent lower over the month, and dropped 30.2 percent since July 2008, the largest over-the-year decrease for energy since publication began.  The special aggregate indexes for all items less energy and for all items less food and energy were nearly unchanged over the month, but were each up 1.6 percent over the year. 

Among the eight major expenditure categories, transportation accounted for more than half of the monthly movement and had the greatest impact on the July 2009 Midwest CPI.  Transportation prices turned down 2.0 percent in July following six consecutive monthly increases.   Motor fuel prices fell for the first time in 2009, decreasing 7.7 percent over the month.  Prices for motor fuel were 38.4 percent lower than one year ago.  Among the other components of the transportation index, prices for new vehicles were unchanged in July, and used cars and trucks’ prices increased 0.6 percent.  Prices for new vehicles were little changed from one year ago while prices for used cars and trucks declined 8.7 percent.  Overall, the transportation index fell 15.2 percent since July 2008.

The housing index was the second largest contributor to the movement of the July all items index, accounting for approximately 20 percent of the movement.  Reflecting rising costs for both shelter and household energy, the housing index increased 0.3 percent over the month.  The household energy index advanced 1.2 percent as electricity prices rose 0.8 percent and utility (piped) gas service costs increased 2.7 percent.  Shelter costs increased 0.2 percent while prices for household furnishings and operations were down 0.3 percent over the month.  Despite the over-the-month advance, housing costs were down 1.8 percent from July 2008, largely attributable to a decrease in prices for utility (piped) gas service.  From July 2008 to July 2009, utility (piped) gas service costs fell 43.2 percent, the largest over-the-year decline since publication began in 1978.  This more than offset a 3.3-percent increase in prices for electricity.  Over the year, costs for shelter rose 0.9 percent and prices for household furnishings and operations were 1.2 percent higher.

The apparel index was the second of only two major groups to show a decline over the month, down 2.2 percent since June 2009.  Apparel prices typically decline in July as retailers continue to discount summer merchandise.  Even so, apparel prices were 1.9 percent higher than one year ago.

The remaining five major expenditure categories—medical care, education and communication, recreation, food and beverages, and other goods and services—each increased by 0.2 percent or less and had little impact on the July 2009 Midwest CPI, together accounting for less than 10 percent of the movement in the overall index.  From July 2008 to July 2009, costs for medical care rose 4.2 percent, education and communication, 2.6 percent, and recreation, 1.1 percent.  Prices for food and beverages were 1.7 percent higher and costs for other goods and services advanced 7.3 percent over the year.

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 204.814 in July 2009.  A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $204.81 in July 2009.  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.  The Midwest region is comprised of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

 

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Scheduled release date for the August 2009 CPI: Wednesday, September 16, 2009

The Midwest Region includes the States of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and 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. 

 

Last Modified Date: August 17, 2009