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Core CPI gets a facelift for the new year

Published on 17 Comments on Core CPI gets a facelift for the new year

Jason Furman passes along the news that updated seasonal adjustments have been applied to the inflation rate. "Some of that inflation slowdown that people (including me) were excited about might have just been a seasonal adjustment quirk."

Let's take a look:

Using the previous seasonal adjustments, core CPI in December was at 3.4% on a trendline basis and had been heading downward since last January. Using the new adjustments, core CPI is currently at 4.1% and has been heading downward since last January.

Core PCE is unchanged and is currently at about 3.3% on a trendline basis.

We'll get another data point on Tuesday, when the latest CPI figures are released. In the meantime, it looks to me like things are still headed in the right direction.

17 thoughts on “Core CPI gets a facelift for the new year”

    1. jdubs

      Difficult to squint hard enough to equate the 9-10% peak rates in spring 2021 to the sub 8% rates in summer '22 or the 4% rates at the end of the year.

      but as you remind us, anything is possible with wishcasting.

    2. rick_jones

      Don’t know that it is flat, but a pre-anxious-for-cheap-money linear Drum Trendline would show a somewhat shallow(er) decline.

      How do I arrive at that conclusion? Because through all but the most recent trough, while the peaks have been declining, the troughs have been rising.

  4. jdubs

    Furman seems to always be on the lookout for evidence to slow down the economy, raise unemployment and push the costs of economic doctrine onto workers. He was a critical part of the great recession and slow recovery and hes been eager to whip up some unemployment this time around.

    Another take on the data would be that while the slowdown in inflation is still evident, it appears there was less inflation in early-mid 2022 than previously thought. Given this new information, the Feds need to raise interest rates over the course of 2022 appears to have been less necessary than previously thought.

    But if the actual goal is to raise unemployment and create cheaper labor costs...the data doesnt really matter, the prescription is always the same.

  5. Brandy Miller

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  6. NotCynicalEnough

    This strikes me as moving the goalposts. Inflation comes in lower than you would like to justify more rate hikes (and suppress wages), so you change the formula and presto, inflation is still too high.

    1. Vog46

      another one, this time over Lake Huron?
      OK time for dumb questions

      where's the Canadian Air Force? And outrage?
      If these things are wind driven just how did the recent one get to lake huron?

      something seems way off on these stories.
      what's the prevailing wind direction at this time of year in these locations?

      are we using balloons too?
      these episodes just seem simplistic to me

      1. Zephyr

        Those things are way up in the jet stream, which basically flows from west to east, with some undulations. Google "jet stream forecast." Get a balloon up to the right height and it will float from China right over the USA. In WWII Japan sent balloons with bombs across the Pacific.

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