The Consumer Price Index for All Urban Consumers (CPI-U) in the Midwest was virtually unchanged, edging up 0.1 percent in December, the U.S. Bureau of Labor Statistics reported today. Movements within the index were mixed, with prices for motor fuel (6.0 percent) having the largest upward impact and costs for apparel (-4.3 percent) contributing the largest offsetting movement. The broader energy index was 2.7 percent higher over the month, but food prices were little changed (-0.1 percent). The index for all items less food and energy also changed little over the month, down 0.1 percent. (Data in this report are not seasonally adjusted. Accordingly, month-to-month changes may reflect the impact of seasonal influences.)

The CPI-U for the Midwest rose 1.8 percent from December 2015 to December 2016. (See chart 1 and table A.) Food prices decreased 0.4 percent, and the energy index, which includes motor fuel and household fuels, was up 8.1 percent. Excluding food and energy, the CPI-U advanced 1.7 percent over the year. (See table 1.)

Food

Food prices in the Midwest were virtually unchanged, down 0.1 percent, in December. Prices for food at home declined 0.3 percent while costs for food away from home, up 0.1 percent, changed little over the month.

The index for food decreased 0.4 percent in 2016. Prices for food at home registered their fifteenth consecutive over-the-year decrease and ended the year 2.4 percent lower than in December 2015. Costs for food away from home were 2.5 percent higher over the year.  

Energy

The energy index had the greatest upward impact on the all items index, turning up 2.7 percent in December following two consecutive monthly declines. Motor fuel prices led the rise with a 6.0-percent increase in December after leading the index downward in November with a decline of the same magnitude. Costs for electricity (-0.3 percent) and utility (piped) gas service (-0.2 percent) were lower over the month.

Energy costs rose 8.1 percent from December 2015 to December 2016 and posted their first over-the-year increase since September 2014.  Motor fuel prices also turned up after more than two years of annual declines and advanced 14.9 percent in 2016. Costs for utility (piped) gas service contributed to the rise in energy costs with a gain of 8.9 percent, but electricity prices were unchanged over the year.

All items less food and energy

The index for all items less food and energy for the Midwest was little changed in December, down 0.1 percent, due to offsetting movements. Apparel prices reflected seasonal trends with a decrease of 4.3 percent in December after declining 1.9 percent in the prior month. Expenditure categories registering higher prices over the month included owners’ equivalent rent of residences (0.2 percent) and other goods and services (0.6 percent).

The index for all items less food and energy was up 1.7 percent from December 2015 to December 2016. A 2.9-percent rise in shelter costs led the advance. Prices for medical care, up 4.7 percent, had the next largest upward impact as prices for medical care services rose 4.8 percent and costs for medical care commodities increased 4.1 percent. Among the expenditure categories that ended 2016 with lower prices were new and used motor vehicles (-1.5 percent), apparel (-2.4 percent), household furnishings and operations (-1.6 percent) and education and communication (-0.2 percent).

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 226.794 in December 2016. A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $226.79 in December 2016.

CPI-W

In December, the Midwest Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was 220.938, up 0.2 percent over the month. The CPI-W increased 1.8 percent over the year.

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

Month	2012		2013		2014		2015		2016
	1-month	12-month	1-month	12-month	1-month	12-month	1-month	12-month	1-month	12-month
January	0.6	2.8	0.1	1.3	0.5	1.4	-0.6	-0.3	0.3	0.8
February	0.2	2.7	1.1	2.2	0.6	0.9	0.3	-0.5	0.0	0.4
March	1.0	2.8	0.2	1.4	0.9	1.5	0.6	-0.9	0.6	0.5
April	0.2	2.3	-0.1	1.2	0.3	1.9	0.1	-1.1	0.4	0.8
May	-0.1	1.5	0.5	1.8	0.2	1.6	0.4	-0.8	0.4	0.8
June	-0.1	1.4	0.3	2.2	0.5	1.7	0.5	-0.7	0.6	0.8
July	0.0	1.3	-0.4	1.8	-0.3	1.8	0.0	-0.5	-0.5	0.4
August	0.7	1.8	0.1	1.2	-0.2	1.6	0.0	-0.3	0.1	0.6
September	0.3	1.9	0.1	1.0	0.1	1.6	-0.3	-0.8	0.2	1.1
October	-0.3	2.2	-0.5	0.8	-0.5	1.6	-0.1	-0.3	-0.1	1.0
November	-0.4	1.8	-0.2	1.0	-0.6	1.2	-0.5	-0.2	-0.3	1.2
December	-0.2	1.8	-0.2	1.0	-0.7	0.7	-0.6	0.0	0.1	1.8

The January 2017 Consumer Price Index for the Midwest region is scheduled to be released on Wednesday, February 15, 2017.

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 6,000 housing units and approximately 24,000 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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