That’s the message today from the PCE deflator.
figure 1: Month-on-month annualized inflation rates for CPI (blue bold), core CPI (tan), PCE deflator (bold sky blue), and core PCE deflator (light green). Dates of peak-to-trough recessions as defined by NBER are shaded in gray. Sources: BLS, BEA via FRED, NBER and author’s calculations.
On a quarter-over-quarter basis, the deceleration appears to be evident, except for core CPI.
figure 2: Annualized quarter-over-quarter inflation for CPI (bold blue), core CPI (tan), PCE deflator (bold sky blue), and core PCE deflator (light green). Dates of peak-to-trough recessions as defined by NBER are shaded in gray. Sources: BLS, BEA via FRED, NBER and author’s calculations.
While Michigan households’ annual expectations for inflation rose slightly in November (5.1% in October versus 5% in October), they were still below expectations for March-April 2022 (5.4%).
