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FOR RELEASE:
June 17, 2009

MIDWEST REGION CONSUMER PRICE INDEX (CPI) -
MAY 2009

Prices in the Midwest Recorded Fifth Consecutive Monthly Increase

The Consumer Price Index for the Midwest rose for the fifth consecutive month, increasing 0.4 percent in May, the U.S. Department of Labor's Bureau of Labor Statistics reported today. According to Regional Commissioner Stanley W. Suchman, rising transportation costs, due almost entirely to higher prices for motor fuel, accounted for nearly three-fourths of the movement in the index. Despite the recent monthly increases, the all items index declined 1.9 percent since May 2008-its sixth consecutive over-the-year decrease.

Among the eight major expenditure categories, transportation had the greatest impact on the May 2009 Midwest CPI with prices rising 3.1 percent. Motor fuel costs rose 12.7 percent, the largest one-month increase since May 2007, and accounted for nearly all of the increase in transportation prices. Prices for motor fuel declined in the latter half of 2008 after peaking in July, but have risen each month in 2009. Despite the recent increases, prices for motor fuel were 43.2 percent lower than their recent peak and 39.5 percent less than one year ago. Among the other components of the transportation index, prices for new vehicles declined for the second month in a row, down 0.5 percent, while used cars and trucks' prices rebounded, rising 1.0 percent in May following 13 consecutive months of decline. Prices for both remained lower than one year ago with the cost of new vehicles down 0.7 percent and prices for used cars and trucks down 10.7 percent. Overall, the transportation index fell 14.8 percent since May 2008.

Costs for medical care, the only other major expenditure category to have an upward impact on the May 2009 index, rose 0.8 percent. Prices for medical care services, which make up three-fourths of the medical care index, rose 0.9 percent, while prices for medical care commodities rose 0.6 percent. Over the year, costs for medical care rose 4.0 percent with commodities prices up 4.0 percent and services prices 4.1 percent higher.

Housing costs were down a slight 0.1 percent over the month. Leading the index, prices for fuels and utilities were 0.8 percent lower. Within fuels and utilities, electricity prices rose 0.7 percent while prices for utility (piped) gas service fell for the tenth consecutive month, down 4.1 percent in May. Over the year, housing costs were down for only the third time since publication began. The housing index was 1.1 percent lower largely due to a 12.0-percent decline in prices for fuels and utilities. Electricity's 7.2 percent price increase since May 2008 was more than offset by a record 38.0-percent decline in prices for utility (piped) gas service. Among the other components of housing, shelter costs were unchanged in May 2009 and prices for household furnishings and operations rose 0.2 percent. Over the year, costs for shelter rose 0.5 percent and prices for household furnishings and operations were 1.9 percent higher.

Apparel and food and beverages each accounted for about 5 percent of the monthly movement in the all items index. Apparel prices typically decline in May as retailers discount summer merchandise. Prices were down 0.8 percent over the month, but were still 1.3 percent higher than in May 2008. Prices for food and beverages were down 0.2 percent in May 2009, but were 3.0 percent higher than one year ago. Within food and beverages, prices for food at home declined 0.3 percent over the month while prices for food away from home were virtually unchanged. Slightly countering the downward movement of the food component, prices for alcoholic beverages rose 0.2 percent over the month. Since May 2008 prices for food at home were up 1.9 percent, costs for food away from home increased 4.4 percent, and alcoholic beverages' prices rose 3.1 percent.

The remaining three major expenditure categories-recreation, education and communication, and other goods and services-had little impact on the May 2009 Midwest CPI, together accounting for about 2.0 percent of all movement. While each of these categories registered little or no change in prices over the month, all recorded higher prices than in May 2008. Over the year, prices for recreation rose 1.1 percent, education and communication, 2.8 percent, and other goods and services, 7.4 percent.

Energy prices, which include prices for motor fuel and household fuels, were 5.4 percent higher over the month, but 29.3 percent lower than in May 2008. The special aggregate index for all items less energy was unchanged over the month and up 1.8 percent over the year. Excluding the impact of food and energy prices, the Midwest CPI registered no movement over the month, but was 1.6 percent higher than one year ago.

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 203.195 in May 2009. A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $203.20 in May 2009. 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.

Consumer Price Index data for June are scheduled for release on Wednesday, July 15, 2009, at 7:30 A.M. (CT).

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