Today's PCE Inflation Report - the Fed's favorite gauge (core PCE) [View all]

Last edited Fri May 26, 2023, 11:39 AM - Edit history (1)

The PCE Inflation report came out today, Friday 5/26/23. On the overall inflation, April (+0.4%) was a surprise increase from March (+0.1%) (see the red bars in the below graph), while the core PCE inflation still remains high, and has not come down much in recent months -- see the blue bars.

The Federal reserve's favorite inflation gauge for projecting FUTURE inflation has been the core PCE (which is the PCE less food and energy). It's not that food and energy are unimportant, but are quite volatile from month to month. The core measure is thought to be better for projecting trends into the future.




Below is the CORE PCE inflation trend -- the rolling 3 month average and the rolling 6 month average
The 3 month rolling average had a nice little downturn because the big January increase (+0.6%) dropped out of the 3 month range


It's still stuck at a little bit more than double the Fed's 2% target.

*********LINKS
PCE News release: http://www.bea.gov/newsreleases/national/pi/pinewsrelease.htm

The above shows 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

The rolling 3 month and 6 month figures are calculated from the index values from the above FRED series for the CORE PCE (not from doing one digit math averages).


Consumer Price Index (CPI) released May 10

For comparison purposes, here is the most recent consumer price index graph (through April, released May 10)

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)


Inflation measures - last 3 months annualized, thru April 2023. Up to date as of 5/26/23

. . REGULAR   CORE
PCE 3.13%     4.25%
CPI 3.21%     5.10%
PPI -0.44%     2.16% (Producer Price Index, aka Wholesale Prices)

Cooling wholesale prices should ideally be reflected in the PCE and CPI in the next month or two, but seems not to be that good of a predictor.