AIER’s Everyday Price Index fell 0.5 percent in August, the second decline in the past three months. Over the past 12 months, the EPI is down 0.1 percent, the first 12-month decline since February and down sharply from the 3.7 percent increase for the 12 months through June 2018. The more widely known price gauge, the Consumer Price Index, was unchanged in August and up 1.7 percent over the past year. The EPI including apparel, a broader measure, fell 0.3 percent in August as apparel prices jumped 1.2 percent for the month. The EPI measures price changes people see in everyday purchases such as groceries, restaurant meals, gasoline, and utilities. The EPI is not seasonally adjusted, so we compare it with the unadjusted CPI. Both EPI measures exclude prices of infrequently purchased, big-ticket items (such as cars, appliances, and furniture) and prices contractually fixed for prolonged periods (such as housing).
Over the last five years, the EPI is up at a 0.2 percent annualized rate while the EPI including apparel is up 0.1 percent. The Consumer Price Index is up at a 1.5 percent annualized pace.
Energy prices pushed the Everyday Price index down in August and is a major contributor to the 12-month and 5-year annualized rates as well. Within the broad energy category, motor fuel prices decreased 4.2 percent for the month while other fuels and utilities fell 0.3 percent. Housekeeping supplies and groceries also were lower for the month. Other categories had very small contributions in August.
The broad category of food away from home, primarily restaurants, was the largest positive contributor in August, continuing a run of 109 months of increases. Price for food away from home rose 0.2 percent in August, on an unadjusted basis. Over the last 12 months, food away from home is up 3.2 percent, well above the broader Consumer Price Index; the five-year annualized gain is 2.7 percent. The broad category makes up about 6.0 percent of the total CPI and 17.4 percent of the Everyday Price Index.
Other positive contributors were nonprescription drugs which posted a 1.6 percent increase for the month and cable and satellite services which rose 0.6 percent, both on a not-seasonally-adjusted basis. Over the past year, nonprescription drug prices are up 2.6 percent while cable and satellite services are up 1.8 percent. Other categories with significant gains over the past year are postage and delivery services (up 5.5 percent), tobacco and smoking products (up 5.4 percent,) fees for lessons (up 3.8 percent), and pets and pet-product prices (up 3.2 percent).
Among the components with the largest weights in the EPI, food at home (20.7 percent weight) is up 0.5 percent from a year ago while food away from home (17.4 percent) is up 3.2 percent, household fuels and utilities (13.4 percent) are down 0.2 percent for the year, and motor fuel (12.2 percent) is down 7.0 percent since last August. Combined, they account for 63.7 percent of the EPI.