Yes, for the core, not for the header:
figure 1: US-Eurozone annualized core inflation differential (blue), 2019-2021M02 average (red), 2021M03-2022M08 average (green). Inflation is calculated as the log difference of CPI (US) and HICP (Euro area). HICP was seasonally adjusted using Census X-13, log transform, X-11 adjustment. The NBER uses shades of grey to define the peak and trough dates of the recession. Source: BLS, Eurostat via FRED, NBER and author’s calculations.
Post-ARP core inflation in the US was significantly higher than in the euro area – 2.2 percentage points, statistically significant at the 10% level. One could interpret this as overly aggressive stimulus; alternatively, one could argue that the eurozone recovery package was not aggressive enough. In other words, it’s not that we don’t get extra inflation.
Finally, in terms of inflation facing consumers, the euro area has experienced the same inflation acceleration as the US. This is shown in the corresponding headline inflation differential chart.
figure 2: U.S.-Eurozone annualized inflation differential (blue), 2019-2022M08 average (red). Inflation is calculated as the log difference of CPI (US) and HICP (Euro area). HICP was seasonally adjusted using Census X-13, log transform, X-11 adjustment. The NBER uses shades of grey to define the peak and trough dates of the recession. Source: BLS, Eurostat via FRED, NBER and author’s calculations.
From June/July 2021, inflation in the euro area has risen relative to the United States as natural gas prices rise. If you examine the change in the disparity in July 2021, inflation in the euro area accelerated by 1.4 percentage points (statistically significant at the 10% scale).
It will be interesting to see what this means for consumer price levels. Normalized to 2021M03 (via ARP), we have the following.
image 3: US-Euro area log price level (blue). HICP was seasonally adjusted using Census X-13, log transform, X-11 adjustment. The NBER uses shades of grey to define the peak and trough dates of the recession. Source: BLS, Eurostat via FRED, NBER and author’s calculations.
