Courtesy of BLS, AIER, and (for nowcast) Cleveland Fed. Prepare for impact.

Figure 1: CPI all urban (bold black), CPI for limited service restaurants, n.s.a. (green), AIER Everday Price Index (red), predicted value using first differences, contemporaneous CPI and lagged AIER EPI (red +), all in logs, 2025M01=0. March observation for CPI is Cleveland Fed nowcast as of today. Predicted AIER EPI uses 2023M04-2026M02 data, nowcasted CPI for March. Adj-R2 is 0.52. Source: BLS via FRED, BLS, AIER, and author’s calculations.

The Cleveland Fed headline CPI nowcast incorporates data on CPI, PCE, and daily oil and weekly gasoline prices. Presumably, as oil prices continue to rise (near $109 today for Brent, as gasoline prices at weekly frequency hit $3.72 (week ending yesterday), the nowcast for March will presumably rise further.

I project (ad hoc) AIER’s EPI for March using a first differences regression estimated 2023M04-2026M02, yielding an adjusted R2 of about 0.52. The nowcasted March CPI is used to project the March AIER EPI. The seemingly disproportionate jump arises (in a mechanical fashion) because the elasticity of m/m EPI growth to m/m CPI growth is around 2.