The Cost of Living and Wages

Here are several price indicators for consumers:

Figure 1: CPI – all urban (black),  CPI wage earners and clerical workers (purple), chained CPI (light green), CPI ex-shelter (blue), AIER Everyday Price Index (red), all in logs 2025M01=0. Source: BLS, AIER, ad author’s calculations.

If you feel like everyday expenses are rising faster than the CPI since February, the AIER’s EPI confirms this impression.

Real hourly earnings deflated accordingly.

Figure 2: Average hourly earnings for production and nonsupervisory workers deflated by CPI – all urban (black),  CPI wage earners and clerical workers (purple), chained CPI (light green), CPI ex-shelter (blue), AIER Everyday Price Index (red), all in 2025$. Source: BLS, AIER, ad author’s calculations.

As for final demand PPI, this picture shows that it’s rising much faster than the CPI.

Figure 3: CPI (blue), final demand PPI (red), both in logs, 2026M02=0. Source: BLS. 

With “fuels and related products” leading the upward movement, I think we can be relatively assured that PPI will be leading CPI (see this post).

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