AIER’s Everyday Price Index jumped 1.1 percent again in April, more than double the 0.5 percent gain in the Consumer Price Index. 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. The EPI including apparel, a broader measure, gained 1.0 percent in April as apparel prices fell 0.2 percent for the month. Both 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 past 12 months, the EPI has risen 1.3 percent while the EPI including apparel is up 1.0 percent. The more widely known price gauge, the Consumer Price Index, reported by the Bureau of Labor Statistics, includes less frequently purchased items and everyday purchases. That measure is up 2.0 percent over the past 12 months. Over the last five years, the EPI is up at a 0.3 percent annualized rate compared to an average annual rise of 0.2 percent for the EPI including apparel and 1.5 percent for the CPI.
The CPI for motor fuels, primarily gasoline, was the major driver in the increase in the EPI in April. For the month, motor fuels jumped 10.1 percent following an 8.8 percent increase in March, on a not-seasonally-adjusted basis. The April surge in motor fuels prices accounted for the entire rise in the overall EPI.
The other significant contributors for the month were food at home, or groceries, and food away from home, or restaurants. Prices for groceries fell 0.3 percent in April, offsetting a 0.3 percent rise in restaurant prices. While the prices of the two major food categories were offsetting in April, they have been on significantly different paths in recent years. Over the last 12 months, grocery prices are up just 0.7 percent while restaurant prices are up 3.1 percent. Similarly, over the last 5 years, grocery prices are nearly flat, rising at just a 0.3 percent annualized rate while restaurant prices have gained at an annualized 2.7 percent rate.
Over the past year, more than 80 percent of the categories that make up the EPI have posted higher prices with 6 categories showing a rise of less than 2 percent and 14 showing gains greater than 2 percent. Four of the categories show price declines over the past year. Apparel prices are down 3.0 percent from a year ago and have decreased at a 0.6 percent annualized pace over the last five years.
Among the components with the largest weights in the EPI, as already mentioned, food at home (21.1 percent weight) is up 0.7 percent from a year ago while food away from home (17.5 percent) is up 3.1 percent; household fuels and utilities (13.4 percent) are up 0.8 percent for the year, and motor fuel (11.4 percent) is up 3.1 percent since last April. Combined, they account for 63.4 percent of the EPI.