CPI m\/m at 0.1% vs. 0.1% consensus (Core 0.3% vs. 0.2% consensus). Here are snapshots of instantaneous inflation rates for September headline, core, supercore, and services supercore CPI, headline and core PPI and HICP and headline and core PCE deflator for August.<\/p>\n
Figure 1:<\/strong> Instantaneous inflation for CPI (bold blue), PCE deflator (green), PCE deflator \u2013 market based pries (brown), HICP (scarlet), PPI (red), per Eeckhout (2023)<\/a>, T=12, a=4. September observation based on PCE nowcasts from Cleveland Fed as of 10\/10\/2024. Horizontal chartreuse dashed line at 2% <\/em>PCE inflation<\/strong> target (for CPI should be about 2.5%). Source: BLS, BEA, Eurostat via FRED, Cleveland Fed<\/a>, and author\u2019s calculations.<\/em><\/p>\n Note that the September observation for the PCE deflator is based on the September nowcast from the Cleveland Fed, as of today, and taking into account the CPI release.<\/p>\n I plot below core measures, using the same vertical scale to retain comparability.<\/p>\n Figure 2:<\/strong>\u00a0Instantaneous inflation for core CPI (blue), chained core CPI (tan), supercore CPI (pink), services supercore (light green), PPI core (red), and PCE core (green), per\u00a0Eeckhout (2023)<\/a>, T=12, a=4. September observation based on PCE core nowcasts from Cleveland Fed as of 10\/10\/2024. Horizontal chartreuse dashed line at 2%\u00a0<\/em>PCE inflation<\/strong>\u00a0target (for CPI should be about 2.5%). Source: BLS, BEA,\u00a0Pawel Skrzypczynski<\/a>, Cleveland Fed<\/a>, and author\u2019s calculations.<\/em><\/p>\n Note that the CPI is usually thought of as a cost of living index. Recently, Bolhuis et al. (2024)<\/a> have argued that interest rates enter into people\u2019s perceptions of the cost-of-living better than the owner equivalent measure used since 1983. Note that both CPI headline (year-on-year) inflation and mortgage rates have been declining in recent months.<\/p>\n Figure 3:<\/strong> CPI headline inflation (y\/y) (blue), expected inflation rate for September 2025 from Michigan survey (light blue square), 30 year mortgage rate (red), all in %. Source: BLS, Freddie Mac, University of Michigan via FRED.\u00a0<\/em><\/p>\n See more on the CPI release by Jan Groen here<\/a>.<\/p>\n \u00a0<\/p>\n<\/p><\/div>\n![\"\"](\"https:\/\/econbrowser.com\/wp-content\/uploads\/2024\/10\/instant10.png\")
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