Restaurant Prices Rise Following Stronger Demand

Chart 1. Prices Over the Long Term
Table 1. Expenditure Categories and February 2015 Weights

After three consecutive months of decline, the Everyday Price Index (EPI) increased 0.5 percent in February. In contrast, the Consumer Price Index (CPI) increased less than the EPI, registering a 0.2 percent increase. Both indexes were led higher by energy prices while prices for food and personal care were mixed. Prices have not weighed heavily on the consumer over the past 12 months who has seen the EPI fall 2.6 percent and the CPI flat.

Food is a key component of the EPI. Overall, food prices increased 0.1 percent in February because a 0.3 percent increase in restaurant prices was offset by a 0.1 percent decrease in prices at the grocery store. The increase in restaurant prices follows a period of rising consumer spending at restaurants. Meanwhile, prices at the grocery store edged lower in February led by a 1.0 percent decrease in both dairy products and fresh fruits and vegetables. Other good news includes meat, poultry, fish, and egg prices that held steady for the second consecutive month.

Overall, energy prices increased 2.1 percent with a large increase in gasoline offsetting a decline in utilities. Gasoline across all grades increased 5.1 percent in February, notching their first increase in 7 months. On the home front, natural gas prices decreased 2.9 percent despite the winter weather. The story was different for Americans using home heating oil which increased 1.9 percent.

The price of taking care of your health was mixed in February. Prescription drugs increased 1.0 percent but prices decreased in other categories. Personal care products decreased 0.1 percent, personal care services decreased 0.7 percent, and the price of gym memberships dipped 1.3 percent. 

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.

To learn more about our methodology, view the weights assigned to each component, and browse past EPI updates, visit AIER’s EPI Methodology page.

Chart 1. Prices Over the Long Term
Table 1. Expenditure Categories and February 2015 Weights