Headline m/m +0.1% vs. Bloomberg consensus +0.2%, core consensus +0.4%. Below are several measures calculated on a monthly (annualized) basis.
figure 1: Month-over-month annualized inflation rates for headline CPI (black bold), core CPI (tan), sticky prices (green), trimmed mean (red), and median (sky blue), all expressed as percentages. Sources: U.S. Bureau of Labor Statistics, Atlanta Fed, Cleveland Fed, and authors’ calculations.
What about pre-shelter core services? Pavel Skrzypzynski Here are the data.
source: P. SkrzypzynskiJune 13, 2023.
All m/m measures trended down, except core (although core service ex-shelter declined).
Can we infer something about headline trends? I plot instantaneous inflation (T=12, a=4) Eckhout (2023)Compared to m/m and traditional 12-month change.
figure 2: Headline CPI MoM inflation (black), instantaneous (T=12, a=4) (bold red) and y/y (green), all in percent. Sources: U.S. Bureau of Labor Statistics and authors’ calculations.
The instantaneous inflation rate in May was 2.8%. During the period 1986-2023M04, CPI inflation was about 43 basis points higher than PCE price inflation, so converted accordingly, instantaneous inflation can be considered to be about 0.4 percentage points above the level consistent with the 2% PCE inflation target.
Whether the downward trend of high-frequency inflation can fall sharply and quickly is a big question. Jason Furman explained why he was skeptical.
