The February Everyday Price Index (EPI) increased 0.5 percent, in contrast to a 0.4 increase in the not seasonally adjusted Consumer Price Index (CPI-U). The EPI measures the prices of goods and services purchased on a frequent basis. Therefore, the EPI reflects the day-to-day impact on consumer budgets.
The EPI was led higher by a 1.1 percent increase in gas prices and a 0.9 increase in the household fuels and utilities. Food prices increased 0.3 percent during February, driven upward by increased prices of meats, poultry, fish, and eggs. The unadjusted CPI was similarly led higher by increases in energy (+1.0 percent) and food (+0.3 percent). However, the CPI was restrained by a decline in the prices of medical equipment and supplies (-0.4 percent) and information technology products (-0.7 percent).
Even though the EPI outpaced the CPI in February, year-over-year inflation figures for both remain persistently low. Year-over-year, the unadjusted CPI increased 1.1 percent while the EPI has declined 1.1 percent. By comparison, the Federal Reserve’s preferred measure, the Personal Consumption Expenditure Index (PCE), increased 1.2 percent over the same period, well below the Federal Reserve’s 2.0 percent target.
Overall, consumers continue to see slow and steady price increases in food and energy. See AIER’s monthly reports for more in-depth looks at inflationary forces in our economy.
About the EPI
AIER’s Everyday Price Index (EPI) measures the changing prices of frequently purchased items like food and utilities. We do this by selecting the prices of goods and services from the thousands collected monthly by the Bureau of Labor Statistics in computing its Consumer Price Index. The EPI basket contains only prices of goods and services that Americans typically buy at least once a month, excluding contractually fixed purchases such as mortgages. Our staff economists weight each EPI category in proportion to its share of Americans’ average monthly expenditures. In order to better reflect the out-of-pocket prices that consumers experience on a daily basis, the EPI does not seasonally adjust prices.