CPI comes in above consensus, on both headline and core. Instantaneous inflation (per Eeckhout (2023)<\/a>) has a slight uptick.<\/p>\n Figure 1:<\/strong> Year on Year CPI inflation (blue), core CPI inflation (pink), supercore CPI inflation (green), %, decimal form. NBER defined peak-to-trough recession dates shaded gray. Red dashed line is implied CPI inflation rate consistent with 2% PCE inflation rate. Source: BLS, NBER, and author\u2019s calculations.<\/em><\/p>\n Supercore CPI includes all items less food, shelter, energy, and used cars and trucks.<\/p>\n While the year-on-year inflation rate is convention, it upweights the distant past rendering it sensitive to including or excluding initial month\u2019s CPI. For an alternative measure which shows some kind of trend, I show instantaneous inflation for the same categories, using Eeckhout<\/a>\u2018s formula (T=12, a=4).<\/p>\n Figure 2:<\/strong> Instantaneous CPI inflation (blue), core CPI inflation (pink), supercore CPI inflation (green), %, decimal form, per Eeckhout<\/a>\u00a0 (T=12, a=4). NBER defined peak-to-trough recession dates shaded gray. Red dashed line is implied CPI inflation rate consistent with 2% PCE inflation rate. Source: BLS, NBER, and author\u2019s calculations.<\/em><\/p>\n Note that by headline CPI inflation, we\u2019re close to the Fed\u2019s target; that\u2019s true also for supercore.<\/p>\n Some of the surprise was driven by owner equivalent rent, which suggests that upward pressure on inflation might be more persistent, given the rebound in house prices.<\/p>\n \u00a0<\/p>\n \u00a0<\/p>\n<\/p><\/div>\n![\"\"](\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/02\/yoyinflation_feb24.png\")
<\/a><\/p>\n![\"\"](\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/02\/instantaneous_feb24.png\")
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