Midwest Information Office

The Consumer Price Index for the Midwest declined 0.3 percent in December, the U.S. Bureau of Labor Statistics reported today. According to Regional Commissioner Jay A. Mousa, over three-quarters of the overall monthly movement was attributable to lower prices for apparel, transportation, and housing.  Compared to the December 2008 level, the all items index was 3.0 percent higher in December 2009. This increase followed a 2.2 percent over-the-year increase in November.

Among the eight major expenditure categories, the apparel index had the greatest impact on the December 2009 Midwest CPI. Apparel prices fell 3.0 percent over the month reflecting seasonal discounting of fall-winter wear. Despite the decline, prices for apparel were 1.6 percent higher over the year.

The transportation index had a slightly lesser impact on the December 2009 all items index than apparel, decreasing 0.6 percent over the month. Lower prices for motor fuel, down 2.6 percent, accounted for virtually all of the decline in the transportation index. Prices for new and used motor vehicles rose 0.3 percent over the month. Compared to their December 2008 levels, transportation prices were 14.8 percent higher led by an increase of 52.5 percent in prices for motor fuel; their December 2008 levels were the lowest recorded since each of these series peaked in July 2008. Costs for new and used motor vehicles increased 4.4 percent over the year. New vehicles prices rose 4.2 percent and prices for used cars and trucks were 7.6 percent higher than in December 2008.

The impact of December’s 0.3-percent decline in the housing component was similar to that of transportation. Lower prices in the housing index were led by a decrease in costs for lodging away from home. Shelter costs fell 0.3 percent over the month, with rent of primary residence registering little movement and owners’ equivalent rent of primary residence unchanged. Electricity prices were down 0.2 percent and utility (piped) gas service costs decreased 1.3 percent. Costs for household furnishings and operations were unchanged over the month. From December 2008 to December 2009, the housing index was little changed. Shelter costs rose 1.2 percent over the year. Prices for fuels and utilities declined 5.1 percent largely as a result of a 22.0-percent decline in utility (piped) gas service costs. Electricity prices rose 3.0 percent over the year and household furnishings and operations costs were down 2.0 percent.

The food and beverages and recreation indexes each accounted for about 10 percent of the movement in the monthly index. The food and beverages index rose 0.3 percent mainly due to a 0.4-percent increase in prices for food at home. Over the year, prices for food and beverages were up a slight 0.2 percent. Offsetting the increase in the food and beverages index, costs for recreation were down 0.7 percent over the month. Over the year, prices for recreation were 0.3 percent lower.

Each of the remaining three major expenditure categories contributed little to the movement of the December all items index, and when combined accounted for less than 5 percent of the movement. Among these, prices for other goods and services were up 0.3 percent and education and communication costs were nearly unchanged. Prices for medical care were unchanged over the month. From December 2008 to December 2009 prices for other goods and services advanced 8.7 percent, education and communication costs rose 2.4 percent, and prices for medical care were 3.6 percent higher.

Energy prices, which include prices for motor fuel and household fuels, were down 1.6 percent in December 2009 but were 16.9 percent higher than one year ago. The special aggregate index for all items less energy decreased 0.2 percent over the month yet was up 1.8 percent over the year. Excluding the impact of food and energy prices, the Midwest CPI declined 0.3 percent over the month but was 2.2 percent higher than one year ago.

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 205.613 in December 2009. A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $205.61 in December 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.