The Consumer Price Index for All Urban Consumers (CPI-U) in the Midwest declined 0.2 percent in December the U.S. Bureau of Labor Statistics reported today. Regional Commissioner Charlene Peiffer noted that the monthly decrease was largely attributable to lower prices for motor fuel which led a decline of 2.1 percent in the energy index. Food prices rose 0.2 percent and the index for all items less food and energy was unchanged.

The CPI-U rose 2.8 percent in 2011. The energy index, which includes motor fuel and household fuels, was up 5.9 percent since last December and the index for food rose 4.7 percent. Excluding food and energy, the CPI-U increased 2.1 percent over the year. (See chart 1.)

Food

Food prices rose 0.2 percent in December. Leading this increase, costs for food away from home advanced 0.3 percent while prices for food at home were little changed (0.1 percent).

From December 2010 to December 2011, the index for food increased 4.7 percent. Higher prices for food at home accounted for nearly three-fourths of the gain, advancing 6.0 percent. Prices for food away from home were up 2.9 percent in 2011.

Energy

The energy index decreased 2.1 percent in December, the seventh consecutive monthly decline. Motor fuel prices had the greatest impact on energy costs, decreasing 3.3 percent. Within household energy, costs for utility (piped) gas service declined 1.1 percent over the month while electricity prices turned up 0.2 percent.

Energy prices were 5.9 percent higher than their December 2010 level despite falling a total of 12.5 percent since May. A 9.6-percent rise in motor fuel costs, all of which occurred in the first half of the year, was almost entirely responsible for the higher energy costs. Prices for electricity were up 3.6 percent but utility (piped) gas service costs decreased 4.9 percent over the year.

All items less food and energy

The index for all items less food and energy was unchanged in December due to offsetting movements within the index. Components registering lower prices over the month included apparel, down 3.2 percent reflecting seasonal trends, and used cars and trucks (-0.8 percent). In contrast, expenditure categories posting higher prices over the month included recreation (1.2 percent), shelter (0.1 percent), and other goods and services (0.7 percent).

The index for all items less food and energy rose 2.1 percent in 2011. Higher costs for shelter (1.5 percent), medical care (3.5 percent), and apparel (5.6 percent) led the advance.

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 215.173 in December 2011. A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $215.17 in December 2011. 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.

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

Month	2006		2007		2008		2009		2010		2011
	Monthly	Annual	Monthly	Annual	Monthly	Annual	Monthly	Annual	Monthly	Annual	Monthly	Annual
January	0.6	3.6	0.1	1.2	0.6	4.3	0.6	-0.3	0.5	2.9	0.5	1.9
February	-0.1	3.0	0.7	2.0	0.2	3.8	0.3	-0.2	0.0	2.5	0.3	2.2
March	0.7	3.1	1.0	2.3	0.9	3.7	0.3	-0.8	0.4	2.6	0.9	2.7
April	0.5	2.8	0.5	2.3	0.8	4.0	0.2	-1.5	0.2	2.7	0.7	3.3
May	0.3	3.3	0.9	2.9	0.9	4.0	0.4	-1.9	0.1	2.4	0.6	3.8
June	0.3	3.4	0.0	2.7	0.9	4.9	1.1	-1.7	0.0	1.2	0.0	3.9
July	0.3	3.3	-0.1	2.3	0.5	5.6	-0.3	-2.5	0.2	1.7	0.1	3.8
August	0.3	2.8	-0.2	1.8	-0.3	5.4	0.4	-1.8	0.2	1.5	0.2	3.8
September	-0.7	0.6	0.6	3.1	0.0	4.8	0.0	-1.7	0.1	1.6	0.2	3.9
October	-0.7	0.1	-0.1	3.7	-1.5	3.3	0.1	-0.2	0.0	1.5	-0.6	3.3
November	0.3	1.3	0.7	4.1	-2.1	0.5	0.3	2.2	0.1	1.2	0.0	3.3
December	0.1	1.7	-0.3	3.8	-1.1	-0.3	-0.3	3.0	0.2	1.8	-0.2	2.8

CPI-W

In December, the Midwest Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) was 211.459, down 0.2 percent over the month. The CPI-W increased 3.1 percent over the year.

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The January 2012 Consumer Price Index for the Midwest region is scheduled to be released on Friday, February 17, 2012.

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 87 percent of the total population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers 32 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 25,000 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/homch17_a.htm.

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 cities; 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.

For personal assistance or further information on Consumer Price Indexes, as well as other Bureau products, contact the Midwest Information Office at (312) 353-1880 from 8:00 a.m. to 4:00 p.m. CT.

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Last Modified Date: January 19, 2012

U.S. Bureau of Labor Statistics | Midwest Information Office, Suite 960, 230 South Dearborn Street, Chicago, IL 60604

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