The Consumer Price Index for All Urban Consumers (CPI-U) in the Midwest was down 0.2 percent in December, the third consecutive monthly decline, the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Stanley W. Suchman noted that the decrease was largely attributable to a 3.1-percent drop in motor fuel prices. Food costs rose 0.3 percent and the index for all items less food and energy was virtually unchanged (-0.1 percent) in December.

The CPI-U for the Midwest rose 1.8 percent from December 2011 to December 2012. Food prices were up 1.9 percent and the energy index, which includes motor fuel and household fuels, rose a modest 0.3 percent. Excluding food and energy, the CPI-U increased 2.0 percent over the year. (See chart 1.)

Food

Food prices increased 0.3 percent in December. Contributing to the overall rise, the indexes for food at home and for food away from home each gained 0.3 percent for the month.

From December 2011 to December 2012, the index for food rose 1.9 percent. Rising costs for food away from home (3.1 percent) led the advance though higher prices for food at home (1.3 percent) also contributed.

Energy

The energy index for the Midwest decreased for the third consecutive month, down 2.0 percent in December. The decline was largely due to motor fuel prices which decreased 3.1 percent over the month. Costs for electricity were down 0.6 percent, while prices for utility (piped) gas service were unchanged.

Energy costs increased 0.3 percent from December 2011 to December 2012. Motor fuel prices rose 1.5 percent and electricity costs advanced 1.3 percent. Moderating the overall rise in energy costs, utility (piped) gas service prices declined 4.0 percent.

All items less food and energy

The index for all items less food and energy edged down 0.1 percent in December. Expenditure categories experiencing lower prices over the month included apparel (-2.7 percent), household furnishings and operations (-0.5 percent), and recreation (-0.2 percent).

The index for all items less food and energy was up 2.0 percent from December 2011 to December 2012, the same over-the-year increase registered in each of the preceding four months. Higher costs for shelter (2.0 percent) and medical care (4.1 percent) led the advance.

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 219.033 in December 2012. A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $219.03 in December 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	0.3	1.9
October	-0.1	3.7	-1.5	3.3	0.1	-0.2	0.0	1.5	-0.6	3.3	-0.3	2.2
November	0.7	4.1	-2.1	0.5	0.3	2.2	0.1	1.2	0.0	3.3	-0.4	1.8
December	-0.3	3.8	-1.1	-0.3	-0.3	3.0	0.2	1.8	-0.2	2.8	-0.2	1.8

CPI-W

In December, the Midwest Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was 215.160, down 0.2 percent over the month. The CPI-W increased 1.8 percent over the year.

____________

The January 2013 Consumer Price Index for the Midwest region is scheduled to be released on Thursday, February 21, 2013.

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.

_________________________________________________________________________________________
Information in this release will be made available to sensory impaired individuals upon request.
Voice phone: 202-691-5200; Federal Relay Service: 1-800-877-8339.
_________________________________________________________________________________________