Midwest Information Office

For release: 7:30 A.M. CT, Wednesday, November 18, 2009
BLSInfoChicago@bls.gov
General Information: (312) 353-1880
Media Contact: Paul LaPorte (312) 353-1138

---

CONSUMER PRICE INDEX, DETROIT-ANN ARBOR-FLINT, MICH. CMSA OCTOBER 2009

 

The Detroit-Ann Arbor-Flint Consumer Price Index for All Urban Consumers (CPI-U) rose a modest 0.2 percent from August to October, according to a report issued today by the U.S. Bureau of Labor Statistics.  This decline contrasts with the 2.0 percent decrease during the same period a year ago. The October 2009 all items CPI-U for the Detroit area was 205.079 (1982-84=100).  Detroit area retail prices were essentially unchanged over the last 12 months compared to the 1.7 percent annual increase during the prior 12-month period.

Jay A. Mousa, regional commissioner for the Bureau in Chicago, stated that rising transportation costs along with rising apparel prices were the largest contributors to the two-month rise in the Detroit-area all items CPI-U. Also reporting price increases, but with less impact, were the components for education and communication and other goods and services. The medical care component was unchanged during the two-month period. The remaining components: housing, which includes shelter and household energy, recreation and food and beverages fell, but were not enough to offset the rising categories.

Driven by rising prices for new and used vehicles coupled with increases for motor vehicle insurance, the transportation component was up 1.6 percent from August to October. In contrast consumers paid 4.2 percent less for gasoline since August 2009. Over the past 12 months, gasoline prices in the Detroit area have fallen 11.9 percent while the overall transportation component was up 1.4 percent.

A 5.3-percent rise in the apparel component also contributed to the area’s overall increase in retail prices from August to October. The apparel index is subject to large seasonal fluctuations, but the recent rise contrasts sharply with the 7.8 percent decline during the same two-month period last year. Over the year, apparel prices were up 3.0 percent after increasing 6.1 percent during the previous 12-month period.

The education and communications component increased 1.7 percent from August to October. The recent bimonthly gain was more than the 1.0 percent increase during the same period in 2008. On an annual basis, the component gained 2.0 percent. This was slightly more than 1.8 percent increase in the prior twelve-month period.

The other goods and services component increased 1.3 percent during this bimonthly period.  This component includes items such as tobacco, haircuts, and legal services. On an annual basis this component rose 8.8 percent, the largest 12-month increase since June 2005.

Medical care costs were unchanged for the two-month period.  For the year, medical costs edged down 0.1 percent. This over-the-year decline compares with the previous 12-month period when costs for medical care were down 0.7 percent.

The food and beverages component fell 0.6 percent from August to October. A 1.6-percent decrease in the food at home index and a 0.8-percent decrease in the alcoholic beverages index both contributed to this change. Prices for food away from home rose 0.7 percent from August-October. Over the past year, the food and beverages component in the Detroit area declined 0.5 percent. Annual increases in the indexes for food away from home (2.3 percent) and alcoholic beverages (1.0 percent) were not enough to offset the annual decrease in food at home (2.9 percent). During the previous 12-month period the food and beverages component rose 4.4 percent.

Recreation prices in the Detroit area fell 3.0 percent from August to October.  Lower prices for televisions and cable and satellite television and radio services contributed to this decline.  Over the year, the recreation component, which also includes items like sporting goods and pet products, fell 2.3 percent.  During the previous 12-month period, the area’s recreation component fell 2.6 percent.

Housing, the area’s most heavily-weighted component in the all items index experienced a 0.5 percent decline from August to October.  Shelter, the component of the housing index that includes rents and owner’s equivalent rents, fell 0.9 percent over the two-month period.  Household energy, which primarily consists of electricity and utility (piped) gas service, rose 1.6 percent from August to October.  Over the year, the housing component in the Detroit area decreased 1.7 percent with shelter prices and household energy prices falling 2.1 percent and 1.6 percent respectively.

The energy component of the CPI, which primarily consists of gasoline, electricity, and utility (piped) gas (commonly known as natural gas), fell 1.2 percent from August to October.  Gasoline was the largest contributor to this drop, falling 4.2 percent.  In contrast, prices for electricity and natural gas rose 1.9 and 1.3 percent, respectively during the two-month period.  Energy costs fell significantly in the Detroit area, down 7.3 percent over the past 12 months and fell in each of the previous eleven 12-month periods.

 

 

---

 

###

Scheduled release date for the November 2009 CPI: Wednesday, December 16, 2009

Detroit-Ann Arbor-Flint, Mich. Combined Metropolitan Statistical Area (CMSA) includes Genesee, Lapeer, Lenawee, Livingston, Macomb, Monroe, Oakland, St. Clair, Washtenaw, and Wayne Counties in Michigan.

 

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: November 18, 2009