The Consumer Price Index for All Urban Consumers (CPI-U) in the Midwest was down 0.6 percent in November, following a decline of 0.5 percent in October, the U.S. Bureau of Labor Statistics reported today. The monthly decrease was largely attributable to an 8.1-percent drop in motor fuel prices. Overall, the energy index declined 4.9 percent. The indexes for food and all items less food and energy each decreased 0.2 percent over the month.

The CPI-U for the Midwest advanced 1.2 percent from November 2013 to November 2014. Food prices increased 3.2 percent and the energy index, which includes motor fuel and household fuels, was down 2.9 percent. Excluding food and energy, the CPI-U rose 1.3 percent over the year. (See chart 1.)

 

Food

Food prices in the Midwest were 0.2 percent lower in November. The index for food at home declined 0.7 percent, the largest one-month decrease since March 2009, while costs for food away from home rose 0.5 percent.  

From November 2013 to November 2014, the index for food was up 3.2 percent. Rising costs for food at home (3.1 percent) led the advance, though higher prices for food away from home (3.4 percent) also contributed to the yearly increase.

Energy

The energy index registered its fifth consecutive monthly decline and had the greatest downward impact on the all items index in November, falling 4.9 percent. The monthly decline in energy costs was largely attributable to an 8.1-percent drop in motor fuel prices, the largest one-month decrease since December 2008. Electricity prices were 2.3 percent lower, while costs for utility (piped) gas service increased 0.7 percent.

The index for energy decreased 2.9 percent from November 2013 to November 2014. Motor fuel prices were down 8.7 percent, the fourth consecutive month of year-over-year declines. Moderating the overall decline in energy costs, electricity prices advanced 3.1 percent and costs for utility (piped) gas service were 7.3 percent higher over the year.

All items less food and energy

The index for all items less food and energy for the Midwest declined 0.2 percent in November. Expenditure categories registering lower prices over the month included apparel (-2.5 percent) and used cars and trucks (-2.6 percent). In contrast, owners’ equivalent rent of primary residence (0.2 percent) and medical care (0.2 percent) were among the expenditure categories posting higher prices over the month.

The index for all items less food and energy was up 1.3 percent from November 2013 to November 2014. Higher costs for shelter (2.1 percent) and medical care (3.0 percent) led the advance.

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 224.396 in November 2014. A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $224.40 in November 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 November, the Midwest Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was 219.886, down 0.8 percent over the month. The CPI-W increased 1.1 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	-0.6	1.2
December	-0.3	3.0	0.2	1.8	-0.2	2.8	-0.2	1.8	-0.2	1.0

The December 2014 Consumer Price Index for the Midwest region is scheduled to be released on Friday, January 16, 2015.

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 89 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers approximately 28 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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