The Consumer Price Index for All Urban Consumers (CPI-U) in the Midwest was down 0.6 percent in January, the fourth consecutive monthly decline, the U.S. Bureau of Labor Statistics reported today. The monthly decrease was largely attributable to a 19.8-percent drop in motor fuel prices. Overall, the energy index was 9.9 percent lower. The indexes for food and all items less food and energy each rose 0.3 percent over the month.

The CPI-U for the Midwest declined 0.3 percent from January 2014 to January 2015. This marks the first over-the-year decrease in the all items index since October 2009. Food prices increased 3.2 percent and the energy index, which includes motor fuel and household fuels, fell 20.6 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 0.3 percent in January. The index for food at home rose 0.3 percent and costs for food away from home were 0.2 percent higher.  

From January 2014 to January 2015, the index for food increased 3.2 percent. Rising costs for food at home (2.8 percent) and food away from home (3.9 percent) both contributed to the yearly advance.

Energy

The energy index registered its seventh consecutive monthly decline, falling 9.9 percent in January, and had the greatest downward impact on the all items index. The monthly decrease in energy costs was largely attributable to a 19.8-percent drop in motor fuel prices, the largest one-month decline since November 2008. Costs for utility (piped) gas service were 4.8 percent lower, but prices for electricity were up 1.4 percent over the month.

The index for energy fell 20.6 percent from January 2014 to January 2015, led by a drop of 38.8 percent in motor fuel prices. Slightly moderating the overall decline in energy costs, electricity prices advanced 5.6 percent and costs for utility (piped) gas service were 0.6 percent higher over the year.

All items less food and energy

The index for all items less food and energy for the Midwest turned up 0.3 percent in January. Expenditure categories registering higher prices over the month included medical care services (0.7 percent) and recreation (0.8 percent). In contrast, apparel (-2.2 percent) and new and used motor vehicles (-0.3 percent) were among the expenditure categories posting lower prices over the month.

The index for all items less food and energy increased 1.6 percent from January 2014 to January 2015. Higher costs for shelter (2.2 percent) and medical care (3.4 percent) led the advance.

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 221.545 in January 2015. A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $221.55 in January 2015. 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 January, the Midwest Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was 216.078, down 0.9 percent over the month. The CPI-W decreased 1.0 percent over the year.

Table A. Midwest region CPI-U 1-month and 12-month percent changes, all items index, not seasonally adjusted

Month	2011		2012		2013		2014		2015
	1-month	12-month	1-month	12-month	1-month	12-month	1-month	12-month	1-month	12-month
January	0.5	1.9	0.6	2.8	0.1	1.3	0.5	1.4	-0.6	-0.3
February	0.3	2.2	0.2	2.7	1.1	2.2	0.6	0.9
March	0.9	2.7	1.0	2.8	0.2	1.4	0.9	1.5
April	0.7	3.3	0.2	2.3	-0.1	1.2	0.3	1.9
May	0.6	3.8	-0.1	1.5	0.5	1.8	0.2	1.6
June	0.0	3.9	-0.1	1.4	0.3	2.2	0.5	1.7
July	0.1	3.8	0.0	1.3	-0.4	1.8	-0.3	1.8
August	0.2	3.8	0.7	1.8	0.1	1.2	-0.2	1.6
September	0.2	3.9	0.3	1.9	0.1	1.0	0.1	1.6
October	-0.6	3.3	-0.3	2.2	-0.5	0.8	-0.5	1.6
November	0.0	3.3	-0.4	1.8	-0.2	1.0	-0.6	1.2
December	-0.2	2.8	-0.2	1.8	-0.2	1.0	-0.7	0.7

The February 2015 Consumer Price Index for the Midwest region is scheduled to be released on Tuesday, March 24, 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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