M/M CPI inflation was 0.4% vs. Bloomberg consensus of 0.6%, while core inflation was 0.3% vs. 0.5%. All metrics (m/m, q/q, y/y, headline/core) are below recent peaks.
figure 1: Headline CPI inflation, m/m (blue), q/q (red), and y/y (green), annualized percentages. The NBER uses shades of grey to define the peak and trough dates of the recession. Source: BLS, NBER, and author’s calculations.
This is an evolution of the core CPI, using the same scale as the title on the left axis.
figure 2: Core CPI inflation, m/m (blue), q/q (red) and y/y (green), annualized percentages. The NBER uses shades of grey to define the peak and trough dates of the recession. Source: BLS, NBER, and author’s calculations.
Finally, note that the official CPI is the Laspeyres base year weight (weights have changed more frequently in recent years), and thus tends to inflate (for any given bundle of goods and services) the inflation rate. Chained CPI mitigates this by changing bundles every year. The PCE deflator is a chained index that, in addition to the included goods and services, should also incorporate changes in spending more quickly than a Laspeyres-type index.
image 3: Overall CPI (blue), chain CPI (red) and PCE deflator (green), q/q annualized, %. Seasonally adjusted chained CPI using Census X-13, ARIMA X-11. The NBER uses shades of grey to define the peak and trough dates of the recession. Source: BLS, BEA, NBER and author’s calculations.
