M/M PPI +0.5% vs.+ 0.2% Bloomberg consensus; m/m core PPI +0.7% vs. +0.2% consensus. Here’s instantaneous (per Eeckhout, 2023) PPI and PCE vs q/q CPI:
Figure 1: Instantaneous inflation (T=12,a=4) for PPI (green), PCE deflator (brown), q/q annualized CPI (blue), all in decimal form %. Calculations per Eeckhout (2023).Source: BLS, BEA, and author’s calculations.
I plot q/q for CPI because the missing October value prevents calculation of instantaneous CPI for the most recent observations. On the other hand, q/q inflation approximates ok for instantaneous for the CPI.
Figure 2: Instantaneous inflation (T=12,a=4) for core PPI (green), core PCE deflator (brown), q/q annualized core CPI (blue), all in decimal form %. Calculations per Eeckhout (2023).Source: BLS, BEA, and author’s calculations.
Cleveland Fed’s PCE deflator nowcast does not rely on the PPI. GS today predicts +0.37% m/m core PCE inflation in December, corresponding to an annualized rate of 2.98%, substantially over the target 2%. The Cleveland Fed’s core PCE nowcast is 0.24% m/m.
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