Price Levels Relative to January 2025

Key Takeaways

• Everyday Price Index rises faster than official CPI measures
• AIER nowcasts April EPI using gasoline price regression (R² = 0.87)
• Core CPI accelerates, while supercore (ex‑food, fuel, housing) remains flat
• Multiple inflation gauges diverge, complicating Fed’s policy assessment
• Log‑scale charts show sustained upward trend through Q2 2026

Pulse Analysis

The AIER Everyday Price Index (EPI) has emerged as a leading barometer of consumer‑facing inflation, outpacing the Bureau of Labor Statistics’ CPI series. By nowcasting April’s EPI through a robust regression on gasoline prices—yielding an adjusted R² of 0.87—analysts can capture real‑time price pressures that lag official releases. This methodological edge is especially valuable as gasoline volatility often foreshadows broader cost movements, offering investors and policymakers a timelier gauge of inflationary risk.

Core inflation, traditionally measured by excluding food and energy, is showing renewed momentum across most CPI variants, yet the supercore index—stripping out food, fuel, and housing—remains comparatively subdued. This split suggests that while underlying price pressures are intensifying, shelter costs are a primary driver of the recent surge. The divergence among CPI‑all urban, CPI‑chained, and the PCE deflator underscores the complexity of interpreting inflation signals, as each metric incorporates different weighting schemes and coverage.

For the Federal Reserve, the widening gap between everyday price indices and official measures raises questions about the adequacy of current policy frameworks. Persistent upward trends on a log scale through the second quarter of 2026 could signal entrenched inflation expectations, prompting a reassessment of rate‑setting strategies. Market participants should monitor the AIER EPI alongside traditional gauges to gauge the trajectory of consumer price dynamics and anticipate potential shifts in monetary policy.