The Everyday Price Index was unchanged in December after falling 0.1 percent in November. The Everyday Price index has been flat or down in five of the last seven months. The Everyday Price Index measures price changes people see in everyday purchases such as groceries, restaurant meals, gasoline, and utilities. It excludes prices of infrequently purchased, big-ticket items (such as cars, appliances, and furniture) and prices contractually fixed for prolonged periods (such as housing).
The Everyday Price Index including apparel, a broader measure that includes clothing and shoes, decreased 0.3 percent for the second month in a row. The Everyday Price Index including Apparel has fallen in four of the past seven months. Apparel prices fell 3.2 percent on a not-seasonally-adjusted basis in December, the seventh decline in the past nine months, and are down 1.2 percent over the past year.
The Consumer Price Index, which includes everyday purchases as well as infrequently purchased, big-ticket items and contractually fixed items, fell 0.1 percent in December. The Everyday Price Index is not seasonally adjusted, so we compare it with the unadjusted Consumer Price Index. Over the past year, the Consumer Price Index is up 2.3 percent while the Everyday Price Index has risen 2.1 percent and the Everyday Price Index including apparel is up 1.8 percent.
Motor-fuel prices were the most significant contributor to the Everyday Price Index in December. Prices fell 1.6 percent for the month on a not-seasonally-adjusted basis. However, over the past year, motor-fuel prices are up 7.6 percent. Motor fuel prices tend to be quite volatile and are largely a function of crude oil prices rather than supply and final demand.
Offsetting the sharp drop in motor fuel prices in December were gains in prescription drug prices, restaurant prices, and cable services prices. Prescription drug prices rose 1.8 percent for the month and are up 3.0 percent from a year ago. Restaurant prices were up 0.3 percent in December and 3.1 percent from December 2018 while cable and satellite TV and radio services prices rose 0.9 percent and 3.4 percent for the month and year, respectively.
The components with the largest weights in the Everyday Price Index are food at home (weighted 20.8 percent and unchanged in December), food away from home (17.6 percent and a 0.3 percent rise), household fuels and utilities (13.2 percent and a 0.1 percent rise), and motor fuel (11.7 percent with a 1.6 percent decrease). Together, these four categories account for 63.3 percent of the Everyday Price Index.
Overall, increases in the Everyday Price Index have been accelerating but remain moderate. Energy prices continue to be volatile with motor fuel posting increases or decreases of more than one percent in 12 of the past 14 months. Grocery prices (food at home) continue to rise at a slow pace in sharp contrast to restaurant prices (food away from home) which have been rising more quickly and persistently. Cable and satellite television and radio services, pets and pet products, recreational reading materials, postage and delivery services, and tobacco and smoking products all have 12-month price increases greater than 3 percent.
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