AIER’s Everyday Price Index rose 0.2 percent in July, partially reversing a 0.4 percent decline in June. The more widely known price gauge, the Consumer Price Index, also rose 0.2 percent in July. 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, rose 0.1 percent in July as apparel prices dropped 1.3 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 just 0.4 percent while the EPI including apparel is up 0.3 percent. The Consumer Price Index is up 1.8 percent over the past 12 months. Over the last five years, the EPI is up at a 0.1 percent annualized rate, the same pace as the EPI including apparel, while the Consumer Price Index is up at a 1.5 percent annualized pace.
The broad category of food away from home, primarily restaurants, rose 0.2 percent in July, 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 6.0 percent of the total CPI and 17.5 percent of the Everyday Price Index. Within the category, the two largest components, full-service and limited-service restaurants, both had price increases of 0.2 percent in July and 12-month price gains of 3.2 percent. Food from vending machines and mobile vendors posted a 0.5 percent increase for the month and is up 4.7 percent from a year ago,
Energy prices also pushed up the Everyday Price index in July. Within the broad energy category, motor fuel prices rose 0.8 percent for the month (a modest change for the category) while other fuels and utilities rose just 0.2 percent. Other categories had very small contributions in July.
Over the past year, three-fourths of the categories that make up the EPI have posted higher prices, with nine categories showing a rise of less than 2 percent and nine showing gains greater than 2 percent. Six of the categories show price declines over the past year. Among the largest gainers and decliners over the past year, postage and delivery services are up 5.5 percent, tobacco and smoking products are up 5.4 percent, fees for lessons are up 3.7 percent, pets and pet-product prices are up 3.5 percent, and restaurants are up 3.2 percent as previously mentioned, while telephone-services prices are down 1.7 percent and apparel prices are down 0.5 percent from a year ago.
Among the components with the largest weights in the EPI, food at home (20.8 percent weight) is up 0.6 percent from a year ago while food away from home (17.5 percent) is up 3.2 percent, household fuels and utilities (13.4 percent) are up 0.4 percent for the year, and motor fuel (12.1 percent) is down 3.3 percent since last July. Combined, they account for 63.7 percent of the EPI.