The Consumer Price Index for All Urban Consumers (CPI-U) in the Midwest rose 0.7 percent in August following three months of little movement the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Stanley W. Suchman noted that higher prices for motor fuel, up 8.9 percent, had the greatest impact on the index. Overall, energy costs rose 5.6 percent over the month. Food prices were 0.2 percent higher and the index for all items less food and energy was virtually unchanged in August.

The CPI-U for the Midwest rose 1.8 percent from August 2011 to August 2012. The energy index, which includes motor fuel and household fuels, registered little movement (0.1 percent), while food prices advanced 1.9 percent. Excluding food and energy, the CPI-U increased 2.0 percent over the year. (See chart 1.)

Food

Food prices rose 0.2 percent in August. Costs for food away from home advanced 0.7 percent, the largest one-month increase since August 2011. Prices for food at home registered little change (-0.1 percent).

The annual rate of increase in food prices has slowed each month since late 2011. From August 2011 to August 2012, food prices rose 1.9 percent, the smallest over-the-year advance since January 2011. Higher costs for food at home (1.4 percent) and food away from home (2.7 percent) contributed to the increase.

Energy

The energy index for the Midwest turned up 5.6 percent in August after declining in each of the four previous months. Motor fuel prices jumped 8.9 percent and were largely responsible for the increase. Costs for utility (piped) gas service, up 3.2 percent, also contributed to the advance. In contrast, prices for electricity registered little movement over the month.

Despite the monthly advance, energy costs were virtually unchanged over the year (0.1 percent). A 3.9-percent rise in motor fuel prices was nearly offset by a 12.3-percent drop in utility (piped) gas service costs. Electricity prices were little changed (-0.1 percent) from August a year ago.

All items less food and energy

The index for all items less food and energy was up a slight 0.1 percent in August due to offsetting movements within the index. Among the components registering higher prices over the month were shelter (0.1 percent), apparel (1.4 percent), and medical care (0.5 percent). In contrast, expenditure categories posting lower prices over the month included new and used motor vehicles (-0.6 percent), household furnishings and operations (-0.6 percent), and recreation (-0.3 percent).

The index for all items less food and energy was up 2.0 percent from August 2011 to August 2012. Higher costs for shelter (1.9 percent), medical care (4.4 percent), and recreation (2.1 percent) led the advance.

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 220.462 in August 2012. A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $220.46 in August 2012. 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.

Table A. Midwest Region CPI-U monthly and annual percent changes (not seasonally adjusted)

Month	2007		2008		2009		2010		2011		2012
	Monthly	Annual	Monthly	Annual	Monthly	Annual	Monthly	Annual	Monthly	Annual	Monthly	Annual
January	0.1	1.2	0.6	4.3	0.6	-0.3	0.5	2.9	0.5	1.9	0.6	2.8
February	0.7	2.0	0.2	3.8	0.3	-0.2	0.0	2.5	0.3	2.2	0.2	2.7
March	1.0	2.3	0.9	3.7	0.3	-0.8	0.4	2.6	0.9	2.7	1.0	2.8
April	0.5	2.3	0.8	4.0	0.2	-1.5	0.2	2.7	0.7	3.3	0.2	2.3
May	0.9	2.9	0.9	4.0	0.4	-1.9	0.1	2.4	0.6	3.8	-0.1	1.5
June	0.0	2.7	0.9	4.9	1.1	-1.7	0.0	1.2	0.0	3.9	-0.1	1.4
July	-0.1	2.3	0.5	5.6	-0.3	-2.5	0.2	1.7	0.1	3.8	0.0	1.3
August	-0.2	1.8	-0.3	5.4	0.4	-1.8	0.2	1.5	0.2	3.8	0.7	1.8
September	0.6	3.1	0.0	4.8	0.0	-1.7	0.1	1.6	0.2	3.9
October	-0.1	3.7	-1.5	3.3	0.1	-0.2	0.0	1.5	-0.6	3.3
November	0.7	4.1	-2.1	0.5	0.3	2.2	0.1	1.2	0.0	3.3
December	-0.3	3.8	-1.1	-0.3	-0.3	3.0	0.2	1.8	-0.2	2.8

CPI-W

In August, the Midwest Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was 217.113, up 0.8 percent over the month. The CPI-W increased 1.8 percent over the year.

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The September 2012 Consumer Price Index for the Midwest region is scheduled to be released on Tuesday, October 16, 2012.

Technical Note

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 88 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers approximately 29 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. Each month, prices are collected in 87 urban areas across the country from about 4,000 housing units and approximately 26,000 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.

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.

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. Because the sample size of a local area is smaller, the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index, although their long-term trends are quite similar. NOTE: Area indexes do not measure differences in the level of prices between cities; they only measure the average change in prices for each area since the base period.

The Midwest region is comprised of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

For personal assistance or further information on Consumer Price Indexes, as well as other Bureau products, contact the Mountain-Plains Information Office at (816) 285-7000 from 9:00 a.m. to 12:00 p.m. and 1:00 p.m. to 4:00 p.m. CT.

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