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FOR RELEASE:
August 14, 2009

MIDWEST REGION CONSUMER PRICE INDEX (CPI) -
JULY 2009

Prices in the Midwest Decline After Six Consecutive Monthly Increases

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 Stanley W. Suchman, 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.

Consumer Price Index data for July are scheduled for release on Friday, August 14, 2009, at 7:30 A.M. (CT).

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