Instantaneous Core Inflation, With PPI And Nowcasted PCE Deflator
With the PPI release, and Cleveland Fed PCE nowcast as of today:
Figure 1: Instantaneous inflation for core CPI (blue), chained core CPI (tan), supercore CPI (pink), services supercore (light green), PPI core (red), and PCE core (green), per Eeckhout (2023), T=12, a=4. August observation for PCE deflator is nowcast as of 9/12/2024 (yoy measure). Horizontal red dashed line at 2% PCE inflation target (for CPI should be about 2.5%). Source: BLS, BEA, Pawel Skrzypczynski, Cleveland Fed, and author’s calculations.
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