The Consumer Price Index for All Urban Consumers (CPI-U) in the Midwest declined 0.5 percent in October, the U.S. Bureau of Labor Statistics reported today. The monthly decrease was largely attributable to lower prices for motor fuel. Overall, the energy index declined 6.4 percent. Food prices rose 0.2 percent and the index for all items less food and energy registered little movement (up 0.1 percent).

The CPI-U for the Midwest advanced 1.6 percent from October 2013 to October 2014. Food prices increased 3.5 percent and the energy index, which includes motor fuel and household fuels, was down 0.6 percent. Excluding food and energy, the CPI-U rose 1.6 percent over the year. (See chart 1.)

Food

Food prices in the Midwest increased 0.2 percent in October. The index for food at home rose 0.2 percent and costs for food away from home were 0.3 percent higher.  

From October 2013 to October 2014, the index for food was up 3.5 percent. Rising costs for food at home (3.6 percent) led the advance, though higher prices for food away from home (3.2 percent) also contributed to the yearly increase.

Energy

The energy index registered its fourth consecutive monthly decline and had the greatest downward impact on the all items index in October, falling 6.4 percent. This was the largest one-month decline since October 2011. The decrease in energy costs was largely attributable to a 7.4-percent drop in motor fuel prices. Lower costs for electricity (-6.4 percent) and utility (piped) gas service (-3.6 percent) also contributed to the monthly decrease.

The index for energy decreased 0.6 percent from October 2013 to October 2014. Motor fuel prices were down 5.0 percent, the third consecutive month of year-over-year declines. Moderating the overall decline in energy costs, electricity prices advanced 4.9 percent and costs for utility (piped) gas service were 6.9 percent higher over the year.

All items less food and energy

The index for all items less food and energy for the Midwest was little changed (0.1 percent) in October due to offsetting movements. Expenditure categories registering higher prices over the month included shelter (0.2 percent) and medical care (0.3 percent). In contrast, used cars and trucks (-2.2 percent) and education and communication (-0.4 percent) were among the expenditure categories posting lower prices over the month.

The index for all items less food and energy was up 1.6 percent from October 2013 to October 2014. Higher costs for shelter (2.3 percent) and medical care (2.8 percent) led the advance.

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 225.793 in October 2014. A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $225.79 in October 2014. 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.

CPI-W

In October, the Midwest Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was 221.564, down 0.7 percent over the month. The CPI-W increased 1.5 percent over the year.

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

Month	2009		2010		2011		2012		2013		2014
	Monthly	Annual	Monthly	Annual	Monthly	Annual	Monthly	Annual	Monthly	Annual	Monthly	Annual
January	0.6	-0.3	0.5	2.9	0.5	1.9	0.6	2.8	0.1	1.3	0.5	1.4
February	0.3	-0.2	0.0	2.5	0.3	2.2	0.2	2.7	1.1	2.2	0.6	0.9
March	0.3	-0.8	0.4	2.6	0.9	2.7	1.0	2.8	0.2	1.4	0.9	1.5
April	0.2	-1.5	0.2	2.7	0.7	3.3	0.2	2.3	-0.1	1.2	0.3	1.9
May	0.4	-1.9	0.1	2.4	0.6	3.8	-0.1	1.5	0.5	1.8	0.2	1.6
June	1.1	-1.7	0.0	1.2	0.0	3.9	-0.1	1.4	0.3	2.2	0.5	1.7
July	-0.3	-2.5	0.2	1.7	0.1	3.8	0.0	1.3	-0.4	1.8	-0.3	1.8
August	0.4	-1.8	0.2	1.5	0.2	3.8	0.7	1.8	0.1	1.2	-0.2	1.6
September	0.0	-1.7	0.1	1.6	0.2	3.9	0.3	1.9	0.1	1.0	0.1	1.6
October	0.1	-0.2	0.0	1.5	-0.6	3.3	-0.3	2.2	-0.5	0.8	-0.5	1.6
November	0.3	2.2	0.1	1.2	0.0	3.3	-0.4	1.8	-0.2	1.0
December	-0.3	3.0	0.2	1.8	-0.2	2.8	-0.2	1.8	-0.2	1.0

The November 2014 Consumer Price Index for the Midwest region is scheduled to be released on Wednesday, December 17, 2014.

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/cpi/.

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 areas; 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.

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