(Reuters) - When the consumer price index is released later this week, it’s likely to look scary because of the run up in gasoline prices that hit at the end of February.
Economists polled by Reuters expect the CPI to be up 0.4 percent in February, double the January rate, mainly on oil price increases that were 11 percent in February. In both January and February, the index would have gone up half as much if food and energy prices were excluded.
Economists in and out of the Labor Department, which publishes the CPI, will try to say that “core inflation” doesn’t include those everyday expenses. But not much is more core to the consumer experience than eating, staying warm, and getting to work.
Now, some economists are taking issue with the way the Labor Department measures prices. That could have huge implications for family budgets, especially for budgets (like those reliant on Social Security benefits) that are dependent on CPI-pegged adjustments.
A group called the American Institute for Economic Research has started publishing a new index it calls the “everyday price index” that measures day-to-day costs of consumer life. In 2011, it says, day-to-day costs for most Americans rose about 8 percent for the year, while the official CPI logged a 3.1 percent increase for the year.