The AIER has an inflation index, the Everyday Price Index (EPI), which measures inflation of things that are commonly purchased: food, gas, but not durable or other goods which people buy only once in a while. It also isn't seasonally adjusted.Inflation indexes are in the news because the Administration has put forward a proposal to tie Social Security to an inflation index that's "chained". The current index doesn't take into account that when the price of something rises, consumers can shift to less expensive replacements. It's too high.
For the same reasons, I think the EPI is valuable since it represents goods that consumers can't shift purchasing to when prices come down: that prices in this particularly area are rising is a problem in that it's precisely the kind of increase in prices people have the least ability to respond to.
The AIER comes up with an argument that the Fed is printing too much money (there's too much money chasing too few goods), but that's not what I see. According to market monetarists, an increase in the cost of goods (really fuel here) won't push inflation if the amount of money remains constant, because the price of other goods will fall. But the EPI isn't measuring the price of those other goods.
What the EPI does show is the weakness of our economy. Consumers are putting off non-everyday purchases, because they don't have enough money. That's why the price of those goods isn't going up as much as others.
