Midwest consumer prices hold steady last month

Consumer prices in the Midwest were relatively flat in September from the month prior, according to the U.S. Bureau of Labor Statistics’ latest consumer price index report released today.

The index for urban consumers increased 0.1% last month, with the biggest movement in energy prices, which declined 1.1% to largely offset minimal increases in food and rent, according to a news release.

The index measures price changes for goods and services, including energy, food, clothing, shelter and health care, compared with a base period of 1982-84. A market basket of goods and services that cost $100 at that time cost $285.28 last month.

Compared with a year ago, consumer prices in the 12-state Midwest region advanced 3.2%, the release said, marked by increases in food prices, up 3.4%, and somewhat offset by a 6% decline in energy attributed to falling natural gas service costs. The price for all other items measured was 4.2% higher over the past 12 months.

In response to the BLS data, National Association of Realtors Chief Economist Lawrence Yun issued a statement connecting the index and interest rates.

“The Federal Reserve’s goal of raising the interest rates has been to bring inflation to near 2%. We are not quite there yet, partly because gasoline prices have been moving up for four straight months,” Yun said.

He then offered an analysis on the rental market increases: “Despite many private sector data pointing toward softer rent growth, the official government measurement is still showing a fast increase. Rents rose 7.4% from a year ago. This is the main reason why consumer prices are not fully under control and why the Fed refuses to consider cutting interest rates.

“It is nonetheless inevitable for rent growth to slow because of the construction of multiple new apartments. Inflation and interest rates will be lower next year.”