Key Fed inflation measure rose 0.6% in January, more than expected

[progree]

12. Last 12 months monthly changes. And Graphs! And rolling 3 month averages

Last edited Sat Feb 25, 2023, 02:17 AM - Edit history (8)

From the news release, http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

Prices

From the preceding month, the PCE price index for January increased 0.6 percent (table 9). Prices for goods and services both increased 0.6 percent as well. Food prices increased 0.4 percent and energy prices increased 2.0 percent. Excluding food and energy, the PCE price index also increased 0.6 percent. Detailed monthly PCE price indexes can be found on Table 2.4.4U.

From the same month one year ago, the PCE price index for January increased 5.4 percent (table 11). Prices for goods increased 4.7 percent and prices for services increased 5.7 percent. Food prices increased 11.1 percent and energy prices increased 9.6 percent. Excluding food and energy, the PCE price index increased 4.7 percent from one year ago.

And they show the last 5 months. I found the latest 12 months (and way beyond) at FRED:

PCE: https://fred.stlouisfed.org/series/PCEPI
CORE PCE: https://fred.stlouisfed.org/series/PCEPILFE

PCE Inflation (just came out today, February 24):


PCE, rolling 3 month averages, annualized
7.2% 7.3% 7.4% 6.2% 4.8% 2.1% 4.2% 3.8% 3.2% 4.0%

CORE PCE, rolling 3 month averages, annualized
4.3% 4.3% 5.4% 4.4% 5.1% 4.5% 5.4% 4.0% 3.6% 4.7%


Consumer Price Index (CPI)

CPI - https://data.bls.gov/timeseries/CUSR0000SA0&output_view=pct_1mth
CORE CPI - http://data.bls.gov/timeseries/CUSR0000SA0L1E&output_view=pct_1mth
(Choose "More Formatting Options" at the upper right of the page for other views such as rolling averages of past 12 months, past 6 months, past 3 months)



Producer Price Index (PPI)

OLD CORE PPI - Producer Price Index, seasonally adjusted - Final demand goods less foods and energy -
http://data.bls.gov/timeseries/WPSFD413?output_view=pct_1mth

CORE PPI - Producer Price Index, seasonally adjusted - Final demand less foods. energy. and trade services - This is the core measure that the BLS features, so I will follow their lead
http://data.bls.gov/timeseries/WPSFD49116?output_view=pct_1mth
(Choose "More Formatting Options" at the upper right of the page for other views such as rolling averages of past 12 months, past 6 months, past 3 months)



Why the Fed thinks core is better for forecasting future inflation: https://www.democraticunderground.com/10143025190#post10

3 months annualized: Core CPI: 4.58%, Core PPI: 4.63%, Core PCE: 4.75%

I chose 3 months for its recency, but that it's still a longer period than one month, so less likely that one can dismiss it as a "one off", as some are trying to do.

To me, there's no way to look at any of these graphs without getting the impression that while inflation is down from the first half of 2022, the last 6 months are showing, at best, a consolidation at more than double the Fed's 2% target. Slightly less optimistically, inflation has been rewarming in the past 6 months.

The latest one-month numbers -- January numbers as reported mid-February (Feb 24 for PCE) -- aren't good either:
Core CPI: 5.06%, Core PPI: 7.27%, Core PCE: 7.07%
CPI: 6.38%, PPI: 8.18%, PCE: 7.69% annualized rates using the actual index numbers

Stocks, Treasury yields, and more (OMG!) : https://finance.yahoo.com/