April 13, 2021 Reading Time: 3 minutes

For a third consecutive month, everyday prices moved sharply higher with gains led by motor fuels prices. The AIER Everyday Price Index increased by 1.2 percent for the month following back-to-back increases of 0.8 percent in January and February, putting the 3-month annualized rate at 11.9 percent and the 12-month gain at 4.4 percent, the fastest pace since November 2011.

Motor fuels prices jumped 11.7 percent for the month following gains of 6.9 percent in January and February and contributed 105 basis points to the 1.2 percent gain in the Everyday Price Index. From a year ago, motor fuels prices are up 22.2 percent. Other significant contributors to the March increase were grocery prices (food at home, up 0.2 percent for the month, contributing 5 basis points to the monthly change), household fuels and utilities (up 0.2 percent for the month and contributing 3 basis points), and admissions prices for movies, theaters, concerts, and sporting events, etc., (up 2.6 percent for the month while contributing 5 basis points).

The Everyday Price Index including apparel, a broader measure that includes clothing and shoes, also rose 1.2 percent in March, following back-to-back gains of 0.9 percent in January and February, producing a three-month annualized rate of 12.7 percent. Over the past year, the Everyday Price Index including apparel is up 3.8 percent, the fastest since February 2012. Apparel prices rose 0.6 percent on a not-seasonally-adjusted basis in March following gains of 1.9 percent in February and 2.9 percent in January. However, from a year ago, apparel prices are off 2.5 percent.

The Consumer Price Index, which includes everyday purchases as well as infrequently purchased, big-ticket items and contractually fixed items, rose 0.7 percent on a not-seasonally-adjusted basis in March. Over the past year, the Consumer Price Index is up 2.6 percent. The Consumer Price Index excluding food and energy rose 0.4 percent for the month (not seasonally adjusted) while the 12-month change came in at 1.6 percent.

After seasonal adjustment, the CPI rose 0.6 percent in March while the core increased 0.3 percent for the month. Within the core, core goods prices were up 0.1 percent in March and are up 1.7 percent from a year ago while core services prices rose 0.4 percent for the month and are up 1.6 percent from a year ago. The rise in the core goods category was led by 0.6 percent increases in used vehicles and tobacco. On the core services side, significant increases came from motor vehicle insurance (up 3.3 percent for the month), transportation services (+1.8 percent), and motor vehicle maintenance services (+1.0 percent).

Energy prices continue to drive the Everyday Price Index higher in the early part of 2021. Like many measures of activity within the economy, some prices continue to be distorted by government restrictions on consumers and businesses. As restrictions are lifted and activity returns to normal, prices will begin to reflect true market forces.

Note: The Everyday Price Index for March is based on incomplete data due to restrictions on data collection by Bureau of Labor Statistics personnel because of the Covid-19 pandemic.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 following more than 25 years in economic and financial markets research on Wall Street. Bob was formerly the head of Global Equity Strategy for Brown Brothers Harriman, where he developed equity investment strategy combining top-down macro analysis with bottom-up fundamentals.

Prior to BBH, Bob was a Senior Equity Strategist for State Street Global Markets, Senior Economic Strategist with Prudential Equity Group and Senior Economist and Financial Markets Analyst for Citicorp Investment Services. Bob has a MA in economics from Fordham University and a BS in business from Lehigh University.

Get notified of new articles from Robert Hughes and AIER.
AIER - American Institute for Economic Research

250 Division Street | PO Box 1000
Great Barrington, MA 01230-1000

Contact AIER
Telephone: 1-888-528-1216 | Fax: 1-413-528-0103

Press and other media outlets contact
888-528-1216
[email protected]

Editorial Policy

This work is licensed under a 
Creative Commons Attribution 4.0 International License,
except where copyright is otherwise reserved.

© 2021 American Institute for Economic Research
Privacy Policy

AIER is a 501(c)(3) Nonprofit
registered in the US under EIN: 04-2121305