Core CPI surprises (0.4% vs. 0.3% m/m) on the upside, while headline at consensus.

Figure 1: CPI headline instantaneous inflation (a=4,T=12) (black), core (sky blue), supercore month-on-month (green), mean month-on-month (red). Instantaneous inflation per Eeckhout (2023). Source: BLS, Dallas Fed via FRED, BLS, and author’s calculations.

Recall the CPI inflation is on average (pre-pandemic) about half a percentage point faster than PCE inflation. In Figure 2, I plot core measures of CPI and PCE instantaneous inflation.

Figure 2: CPI core instantaneous inflation (a=4,T=12) (sky blue), PCE core instantaneous inflation (tan), Instantaneous inflation per Eeckhout (2023). Source: BLS, BEA via FRED, and author’s calculations.

Over the period shown above, the difference is 0.44 percentage points.

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