Inflation was a hot topic in the news this week: pointing to +4% annual rate.
Posted on April 12, 2024

Inflation was a hot topic the last two days. The last three months are running at an annual rate at more than 4% inflation. This post shows six graphs I use to follow the inflation trends. We get the last report for inflation for March at the end of this month: Personal Consumption Expenditures (PCE) – the one that the Fed favors for decision-making on interest rates. The one good graph is the fifth graph on Producer’s Price Index: the increase for March was slight.

 

Going deeper: below I display a table and the same six graphs that I’ve use to follow the trends in inflation. This table has PCE through February, not March.

 

 

== Inflation trends ==

 

The two most widely-reported measures of inflation are Seasonally-adjusted inflation and Core inflation. These and most all other measures of inflation are reported at about the two-week point in the following month.

 

Seasonally-adjusted inflation increased by 0.38% in March. The rate over the last six months aims at an annual rate of 3.1%.

 

 

Core inflation excludes volatile energy and food components. This is similar to the measure favored by the Federal Reserve. Inflation increased by .36% in March. The last six months aim at an annual rate of 3.9%. The last three aim at 4.5% inflation.

 

 

Personal Consumption Expenditures (PCE) excluding Food and Energy (February) is the measure of inflation that the Federal Reserve Board favors. The last six months aim at an annual rate of 2.9% and the last two aim at 4.3% inflation.

 

 

== History of 12-month inflation ==

 

Full-year inflation measured by CPI-U shows that inflation for the last 12 months has been 3.5%.

 

 

== Producer’s Price Index ==

 

The change in producer prices will impact consumer inflation. PPI over the last six months is at a -2.9%. annual rate. The increase for March was slight and mu lower than the 1.47% increase in February.

 

 

== Services ==

 

The last six months aim at an annual rate of 5.7%.

 

 

 

Conclusion: Inflation for the last three months is running at 4.5% or greater.