Instantaneous Core Inflation

Four out of five measures down:

(Click on image to enlarge)

Figure 1: Instantaneous inflation for core CPI (blue), chained core CPI (tan), supercore CPI (pink), PPI core (red), and PCE core (green), per Eeckhout (2023), T=12, a=4. June PCE core is nowcast as of 7/23. Source: BLS, BEA, Cleveland Fed, and author’s calculations.

While instantaneous core PPI rose in June, a regression of core CPI on lagged core PPI and lagged core CPI (all instantaneous) over the data shown above yields a statistically insignificant coefficient on on lagged PPI. This is also true using m/m inflation.

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