Inflation Deceleration – Multiple Measures

In today’s release, headline m/m CPI inflation was down sharply, from 11.4% to 5.8%, annualized. Various measures derived from the  data in the release, including the inflation rate of the sticky price CPI — that focuses on infrequently changed prices — declined slightly, suggesting easing pressures. The trimmed CPI — which excises highly volatile components — was also falling indicating it’s not outliers driving July decreases.

Figure 1: Month-on-month annualized inflation from CPI-all urban (blue), from personal consumption expenditure (PCE) deflator (black), chained CPI  (brown), sticky price CPI (green), and 16% trimmed mean CPI (red). Chained CPI inflation seasonally adjusted by author. Source: BLS, Atlanta Fed, Cleveland Fed, via FRED, and author’s calculations.

The general discussion stressing y/y changes is understandable, but frustrating as it really tells almost as much about the past as the present, in the current context.

What about core measures? The core CPI inflation rate was also sharply down, as shown in Figure 2 (no trimmed core shown).

Figure 2: Month-on-month annualized inflation from CPI-all urban (blue), from personal consumption expenditure (PCE) deflator (black), chained CPI  (brown), and sticky price CPI (green). Chained CPI inflation seasonally adjusted by author. Source: BLS, Atlanta Fed, Cleveland Fed, via FRED, NBER, and author’s calculations.

The chained CPI and sticky price m/m inflation rates were also down. (I adjusted the not seasonally adjusted chained measures of CPI by calculating the m/m growth rates, and then applying a simple seasonal adjustment that uses deviations from an arithmetic moving average.)

In other words, every easily measurable indicator of m/m inflation is down.

The pandemic has made it more important to examine the role of specific components. CEA notes that the share of m/m inflation (not annualized) accounted for by pandemic affected services and vehicle related items dropped substantially, driving the reduction in overall m/m inflation.. This is shown in this graph:

Source: CEA (8/11/2021).

50 thoughts on “Inflation Deceleration – Multiple Measures

  1. Not Trampis

    We superior types from down under who mostly pay attention to the trimmed mean figure ( A series promoted by our own central bank) always thought inflation was transitory.
    john cochrane has some egg on his face me thinks

    1. Moses Herzog

      @ Not Trampis
      Your obsession with America getting 39 Olympic gold medals vs Australia’s 17 has got to stop. You were the first person to mention it here in this thread, not me. We love Australia for all you’ve done to clean out our filthy system, no matter what the orange abomination says about Alexander Downer, if I met him in a bar he’d have all the drinks he wanted on my billing.

      And I never said Stubblety-Cook sounds like an occult word for a Harry Potter wizard spell, no matter what Menzie tells you.

  2. Paul Mathis

    Larry Summers says “Inflation is Here”.

    He claims Jay Powell and the Fed have been wrong about sustained inflation which is 5%.
    He says we are in a wage/price spiral and that new federal spending is not being “paid for” which is a problem.
    We have a serious labor shortage but wages don’t keep up with inflation. He uses the example of a restaurant
    on Cape Cod where he is vacationing which normally has 5 waiters, but now only has 3. He claims the waiters will quit because they
    are overworked and not paid more. He apparently forgets that waiters earn tips which are now only split 3 ways instead of 5.

    1. Moses herzog

      If this was an attempt at dry/straight humor, you have succeeded because I swear to God this made me laugh, I assume for the same reasons it would make you also laugh. Larry is taking his best stiletto heals and digging them deeper into the ground no matter where these inflation numbers go, you better believe it Mr. Mathis. We also have John Cuckrant’s “I could never be wrong about anything” Grumpy Economist posts on inflation to look forward to. Too bad Johnny Carson isn’t still alive to grab these out of the newspaper and turn them into comedy gold. But, still, they are pretty funny in “raw form” without a comedy writer’s touch up.

    2. macroduck

      I think we ought to weigh claims about trends in the data in much the same manner as economic data; separating noise from signal requires the passage of time. Summers, being a very noisy man, cannot be relied upon for anything useful in the near term. Judge for yourself regarding the longer term.

  3. Not Trampis

    Sorry Larry but unless wages break out it aint gonna happen. Wage/price spirals happen when the labour market has a reasonable amount of unionisation.

    I do not pay attention to the Olympics.

    1. Paul Mathis

      Did you see that Ted “No Mask Mandates” Cruz sends his 2 daughters to a private school that mandates masks at all times on school property?
      You can’t make this stuff up.

      1. pgl

        Ted is so two faced that most Republican detest this clown. Of course he thinks his family is more entitled than the families of us mere rubes.

  4. ltr

    August, 2021

    Growth at Risk From Climate Change
    By Michael T. Kiley


    How will climate change affect risks to economic activity? Research on climate impacts has tended to focus on effects on the average level of economic growth. I examine whether climate change may make severe contractions in economic activity more likely using quantile regressions linking growth to temperature. The effects of temperature on downside risks to economic growth are large and robust across specifications. These results suggest the growth at risk from climate change is large—climate change may make economic contractions more likely and severe and thereby significantly impact economic and financial stability and welfare.

  5. ltr

    August 12, 2021

    Over 1.82 bln doses of COVID-19 vaccines administered in China

    BEIJING — Over 1.82 billion doses of COVID-19 vaccines had been administered in China by Wednesday, the National Health Commission said Thursday.

    [ Chinese coronavirus vaccine yearly production capacity is more than 5 billion doses. Along with over 1.82 billion doses of Chinese vaccines administered domestically, another 770 million doses have been distributed internationally. A number of countries are now producing Chinese vaccines from delivered raw materials. ]

    1. Barkley Rosser

      According to WaPo today, Indonesia has joined Thailand recently to reduce teliance on Sinovac because of its apparent poor performance in those nations.

        1. Barkley Rosser


          But quite a few other nations have something, with many of them, including Russia, having ones that most reports say are superior to Sinovac, which, again, the Chinese are selling, not donating to poor countries as the US is doing with some of its. However indeed PRC has produced more than other nations have.

    2. ltr

      August 12, 2021

      Chinese mainland reports 81 new COVID-19 cases

      The Chinese mainland recorded 81 new confirmed COVID-19 cases on Wednesday, with 61 being local transmissions and 20 from overseas, the latest data from the National Health Commission showed on Thursday.

      In addition, 38 new asymptomatic cases were recorded, while 511 asymptomatic patients remain under medical observation.

      This brings the number of confirmed COVID-19 cases on the Chinese mainland to 94,161, with the death toll unchanged at 4,636.

  6. Moses Herzog

    Sweetheart Pelosi at it again:

    Because nothing exhibits a love for young people like saddling them with student loans they won’t pay off until they reach middle age or have their credit score wrecked. She’s a kinder gentler Hillary. It’s important to tell your own constituency to go F___ themselves, otherwise, how do guys like donald trump get back in the race again?? Then we can all go running to Pelosi again for her “We’ll impeach him two months before his term ends” wisdom and “leadership”.

    1. pgl

      Oh gee – following what the law says. What a bitc%. Oh wait – maybe you did not actually READ this link to the end. OK – time to lay off the morning wine. Pelosi would pass this through Congress if the lame Senators decided to get the filibuster out of the way. But of course you need some dishonest way to smear this ice cream eating bitc%.

      1. Moses Herzog

        Reading comprehension just isn’t your strong point, is it pgl??

        Nancy Pelosi quoted directly in the Politico article authored by Michael Stratford:
        “Suppose … your child just decided they, at this time, [do] not want to go to college, but you’re paying taxes to forgive somebody else’s obligations,” Pelosi said during a news conference. “You may not be happy about that.”

        Farther down in the article:
        But she also raised concerns about the fairness of student loan debt cancellation. She cited the example of a family without a child in college having to pay taxes “to forgive somebody else’s obligations.”

        and still farther down in the Politico article by Michael Stratford, Pelosi’s colleagues discussing their anger on her very obvious stance:
        Progressives who back widespread debt cancellation shot back at Pelosi’s remarks. “Suppose your child did not want to go fight countless and endless shadow wars across the globe, at this time, but you’re paying taxes to fund all of that,” Rep. Rashida Tlaib (D-Mich.) said on Twitter. “You may not be happy about it!”

        Now pgl, I know you are very adept at playing dumb, really to the point you have me convinced…… but how do you manage to miss 3 separate paragraphs detailing Pelosi’s stance on student debt forgiveness. Are you that intent on all of Menzie’s readers regarding you as a moron??~~or just so many months of reading “TPM”, MSN, and “veteranstoday dot com” has finally had a deeply harmful effect on your cognitive processes??

        1. pgl

          Oh gee – Nancy does not follow your play book on everything? And for that reason – she should be drawn and quartered? No more ice cream for this old lady. Please warn me before you are mad dictator – so I can move to New Zealand.

      2. JohnH

        Funny…pgl has yet to notice that Democrats in Congress function like Cuomo’s Independent Democratic Conference (IDC). When there were enough Republicans in theNY Senate, Cuomo would work with them to block progressive legislation. But when Republicans got voted out, Cuomo got the IDC to block progressive legislation. Now voters threw out the IDC and Cuomo had to resign.

        In D.C. there are plenty of Democrats like NY’s IDC, eager to make legislation “politically unfeasible.” Time to throw the bums out.

        1. pgl

          Hey JohnH – tell your stupid BFF (old Uncle Moses) that Kathy Hochul is taking over. Your BFF must have been drunk for the last few days and he seems to have missed that.

          BTW – voters did not force Cuomo to resign. It was fellow Democrats. And it was not over policy as much as was over sexual harassment. Sad to see you have joined your BFF putting policy over the treatment of women.

      3. JohnH

        “ Oh gee – following what the law says.” Pgl might be interested in how Biden and others got that law in the first place. What a sick, corrupt process.

        Now the law is under assault on many fronts, as Matt Taibbi explains (a great read!):

        As usual, pgl, the self-anointed progressive growth liberal, sides with a corrupt, abusive industry. No surprise there!

        1. pgl

          Not getting more financial aid is sexual harassment? WTF? I see why old uncle Moses likes you. You are as drunk, blind, and uncaring about the rights of women as he is.

          BTW I used to live near Hunter College and I support more financial aid for their students. But I also get that sexual harassment is a different issue. Do you? Do you give a damn about this issue? I guess not and neither does your BFF.

    2. macroduck

      As I understand the separation of powers, Pelosi’s views on this matter are formally important only to the extent that courts grant her standing in a legal action. They may, but they may require that she suffer direct harm in order to have standing– no harm, no case.

      Politically, she matters, of course.

      1. pgl

        Someone gets our Constitution. Please mail copies of Constitutional Law for Dummies to JohnH and old uncle Moses.


      Like Student Loans matter that much to the average citizen. Corporations push the education con for their business model. Basically a form of rentier leeching. My view is similar to Biden: start with a 2 year degree. Then get to work. If you want to go back later and finish for your career, so be it. Colleges have been nothing but consumer debt props for the last 50 years.

  7. Moses Herzog

    I bet I know a blog host/ social scientist who is excited to get some new Census data today.

    1. ltr

      August 12, 2021

      Food inflation in India eases to 5.59 pct

      NEW DELHI — Food inflation in India fell from 6.26 percent in June to 5.59 percent in July, as a result of reduction in food prices between the two months, the data released by the federal Ministry of Statistics and Programme Implementation showed on Thursday.

      Besides the overall fall in food prices, the easing of supply chain disruptions has also been attributed as one of the reasons for the fall in food inflation between the two months.

      Supply chain disruptions were witnessed in April-May as a result of lockdowns imposed by several state governments amid the deadly second wave of COVID-19 pandemic.

      To calculate food inflation, the price data are collected from the selected 1,114 urban markets and 1,181 villages covering all states through personal visits by field staff of the Field Operations Division of the National Statistical Office (NSO) on a weekly roster.

      During July, the NSO collected prices from 99.5 percent villages and 97.8 percent urban markets, while the market-wise prices reported therein were 85.8 percent for rural and 89.7 percent for urban.

      Retail food inflation, which is measured by the Consumer Price Index (CPI), had shot up to 6.30 percent in May and cooled slightly to 6.26 percent in June….

    1. pgl

      It is law in my state. And the violator in chief is leaving office. Actual New Yorkers are cheering both developments whereas some old Oklahoma drunk is still lying about what we stand for. After all cheap partisan attacks are more important than the rights of women in your little basement where you hide from reality.

      BTW if you want to join your buddy Greenwald on Fox and Friends, your BFF Princeton Steve can hook you up.

      1. Moses Herzog

        Well, the next time a New York official who molests women in the workplace and grooms them for sex, we’ll all have to be more quiet and soft-spoken. Or would you prefer complete silence on the issue of using women for sex in the highest halls of power in New York?? If I’d known discussing the abuse of women by powerful people upset you so much I would have just gone on playing with my lego blocks here and left the mature discussion to you pgl.

        Since we now know it emotionally upsets you when sex crimes committed by New York government officials are discussed on the blog, can you tell us which sex crimes or other categories of crimes New York officials or your state Governors’ commit cannot be discussed, because they are “partisan”, so we know which ones you disallow discussion on?? I’m bowing down to your authority, with your status as a Georgia born New Yorker, of course.

        1. pgl

          Discussion of these issues is needed. But people like you do not care about the women – you care only about having a wedge issue for partisan purposes. This has become very very clear. Which makes you a very low life – not as low as a rapist but pretty damn low.

    2. JohnH

      Cuomo was in bed with the nursing home industry leading to a scandal about the high number of COVID related deaths coupled with the industry’s impunity. But Cuomo survived that. All of which shows that Democrats don’t care about corruption. They basically gave Trump a free pass, probably because he knew where all the bodies of Democrats’ victims lay.

      But when it comes to sex, Democrats get incensed, truly outraged, but only if some Democrat’s cover gets blown.

      1. pgl

        Seriously? Greenwald tried to make that everyone knew. I have challenged anyone to find a Greenwald piece or twitter rant that preceded this scandal where he noted Cuomo was doing this. No one has so far.

        Now if there is some comment by you that noted earlier on that Cuomo committed sexual harassment – please provide it. Otherwise – you are just blowing smoke.

      2. pgl

        David Sirota is quite the Bernie Bro, which is cool. But let’s review some of his history.

        After that awful bombing at the end of the 2013 Boston Marathon – he wrote a column entitled “Let’s Hope the Boston Marathon Bomber Is a White American”.

        His advocacy for progressive positions have often relied on distortions of the facts that would embarrassment even Faux News.

        Yea I get he is now a critic of the Democratic Leadership Council but he was praised by John Podesto as having an eye for critique and the instinct for the jugular to the point of being described as the internet child of the Clinton War Room generation.

        If we go back to a 1999 race in Philadelphia he created a website that spit out racial comments attributed to their opponent John White:

        But even Sirota did not claim everyone knew Cuomo was a sexual predator.

        1. JohnH

          Totally unhinged. pgl has lost it.

          Everybody in NYC knows that Cuomo got away with being in bed with the nursing home industry, but Democrats shrugged off the corruption.

          The Democratic leadership could care less about corruption, but sexual harassment is a big deal.

  8. chantelle oliver

    We are, and have been, in a recession since 2007. And now we are transitioning into depression. There is no liquidity; the banks are not lending; there is no faith on the inside. And, when our prophets speak (Central bankers, bankers, Fed) we no longer react exactly as they would like, exactly as we used to. The Economy is our Religion and our Politics and the continuation of the sacred. If we do not think. collectively, ourselves into a logic other than Market, the violence will be unending until we are disciplined to do so.

    1. pgl

      “We are, and have been, in a recession since 2007.”

      Someone was asleep for over a decade (late 2009 to early 2020). Greetings our new Rip van Winkle.

      1. Moses Herzog

        @ pgl There are regions or locales where the statement may have a large degree of truth in it. People don’t always see the world through the same lens. They may not even agree with the demarcations made by NBER (oh!!!! the abomination!!!!). We already know you view yourself as omnipotent. You needn’t feel the desire to engage in putdowns 24/7 for regular readers here to know you are in bad need of attention and recognition. We “get it” and “got it” long ago.

        1. Dr. Dysmalist

          I don’t care what lens people are seeing through, “recession” already has a specific meaning: it is the period when economic activity is declining, i.e., ‘receding;’ hence the name.

          I said in a previous thread that we need a new word to describe a period when many or most people feel imperiled economically.

          If you want to coin a word for households’ economic stress, have at it. I’ll be happy to give you full attribution. But “recession” ain’t it; it’s already taken.

          1. Moses Herzog

            @ Dr. Dysmalist, Sometimes states are said to be in recessions when the nation as whole is not. Cities, etc. Is the concept of geographic region too complex for those with a PhD in Economics?? I sincerely hope not—you’re having enough problems selling a “2 month long recession”. For people in a much more crappy situation than they were one year ago in an “accelerating” economy, it’s an asinine use of terminology, anyway you care to slice it, and is Exhibit A on why many people don’t listen to a damn word economists say. If you and Menzie enjoy the situation where 75%+ of the public doesn’t give a flying crap what professional economists have to say about any topic under the sun–please, don’t let me interrupt your train of thought.

          2. pgl

            chantelle did not tell us what region she is talking about. Maybe Moses read it to be his household which has clearly been depressed for 14 years.

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