MIDWEST REGION CONSUMER PRICE INDEX (CPI) -
OCTOBER 2009

Prices in the Midwest nearly unchanged in October and 0.2 percent lower over the year

The Consumer Price Index for the Midwest was nearly unchanged, up 0.1 percent in October, the U.S. Department of Labor's Bureau of Labor Statistics reported today. According to Regional Commissioner Stanley W. Suchman, movements among the major expenditure categories were varied, but more than 80 percent of the overall movement was attributable to higher prices for transportation and lower prices for housing. Since October 2008 the all items index declined 0.2 percent-its eleventh consecutive over-the-year decrease.

Among the eight major expenditure categories, transportation had the greatest impact on the October 2009 Midwest CPI. Transportation costs advanced 1.5 percent following a decrease of 1.3 percent in September. Higher prices for new and used motor vehicles accounted for nearly half of the upturn in the transportation index, rising 1.9 percent in October. This was the largest one-month increase recorded for new and used motor vehicles since publication began in 1998. Prices for new vehicles rose 2.0 percent and prices for used cars and trucks advanced 2.5 percent. Higher prices for motor fuel also contributed to the monthly increase in the transportation index, advancing 1.3 percent. Overall, the transportation index decreased 3.9 percent since October 2008, registering its twelfth consecutive month of over-the-year decline. Prices for motor fuel were 17.5 percent lower than one year ago. In contrast, the index for new and used motor vehicles advanced 2.3 percent over the year, as prices for new vehicles rose 3.5 percent and prices for used cars and trucks increased 1.1 percent.

The housing index had the next largest impact on the October all items index with its 0.5 percent decrease partially offsetting the increase in the transportation index. Falling prices in the housing index were primarily due to lower costs for electricity. Electricity prices, which typically decline in October reflecting a shift in seasonal rate schedules, fell 8.7 percent over the month, while utility (piped) gas service costs increased 2.7 percent. Shelter costs were little changed over the month and prices for household furnishings and operations decreased 0.4 percent. From October 2008 to October 2009, the housing index decreased 0.6 percent largely as a result of a 30.0-percent decline in utility (piped) gas service costs. Electricity prices rose 2.9 percent over the year, shelter costs were up 1.2 percent, and household furnishings and operations costs were down 1.0 percent.

Each of the remaining six major expenditure categories contributed little to the movement of the October all items index. Three of these six expenditure categories-recreation, medical care, and apparel-together accounted for around fifteen percent of the movement. Among these, prices for recreation had the largest impact and were down 0.6 percent, medical care costs increased 0.4 percent, and prices for apparel were up 0.6 percent. From October 2008 to October 2009 prices for recreation were little changed, medical care costs advanced 3.9 percent, and apparel prices were 1.3 percent higher.

The remaining three expenditure categories-food and beverages, education and communication, and other goods and services-together accounted for less than four percent of the movement in the monthly index. The food and beverages and education and communication indexes registered little movement over the month, and prices for other goods and services were unchanged. From October 2008 to October 2009, prices for food and beverages were virtually unchanged, costs for education and communication rose 2.7 percent, and prices for other goods and services advanced 7.7 percent.

Energy prices, which include prices for motor fuel and household fuels, declined 1.7 percent in October. Costs for energy were 14.8 percent lower than one year ago. The special aggregate index for all items less energy was up 0.2 percent over the month and 1.6 percent over the year. Excluding the impact of food and energy prices, the Midwest CPI rose 0.3 percent over the month and was 2.0 percent higher than one year ago.

The Midwest Consumer Price Index for All Urban Consumers (CPI-U) stood at 205.706 in October 2009. A typical market basket of goods and services that cost $100.00 in the 1982-84 base period cost $205.71 in October 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. The Midwest region is comprised of Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri, Nebraska, North Dakota, Ohio, South Dakota, and Wisconsin.

Consumer Price Index data for November are scheduled for release on Wednesday, December 16, 2009, at 7:30 A.M. (CT).

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