CPI Inflation in October

Headline CPI flat (below +0.1% consensus), and core CPI inflation at 0.2% (below +0.3% consensus). Here are some pictures of central tendency, trend:

Figure 1: Headline CPI inflation, y/y (blue), core CPI inflation y/y (tan), trimmed mean CPI inflation m/m ann’d (tan), median CPI inflation m/m ann’d (pink), headline CPI instantaneous, T=12, a=4 per Eeckhout (bold red), all in %. Source: BLS, Cleveland Fed via FRED, BLS, and author’s calculations.

Instantaneous inflation (T=12, a=4) is now at 3.2%. The implied CPI target conforming to 2% PCE inflation is about 2.45% (0.45 is the difference between CPI and PCE inflation over the 1986-2019 period), so instantaneous inflation is about 0.75 ppts above target.

BLS supercore y/y inflation at 2.8%. Everything you wanted to know about core services ex shelter inflation, see Pawel Skrzypczynski’s website. y/y right now at 3.9%.


Additional rate hike next meeting off the table. From CME FedWatch:

And 10 year Treasury yields, from TradingEconomics.





12 thoughts on “CPI Inflation in October

  1. Moses Herzog

    We need good news nowadays, yeah?? I take this as good news.

    Congress getting entertaining tonight as well.

  2. Ivan

    The main driver of inflation now seems to be the Fed. Their selling of mortgage securities and increases in rates are pushing the housing parts of inflation up substantially. The rest of inflation is apparently under control at this time.

  3. baffling

    as i have said on this blog before, anything under 4% is benign. the threat of higher rates is gone for now. the fed needs to start to message that rates will begin to slowly drop. if they continue the message of steady long term, the soft landing will be lost and we will get a recession. the fed has had success until now. i hope they intent to finish with success and not a recession. it can still happen. steady rates mean monetary contraction if inflation is falling. it will cause a recession within a year.

  4. pgl

    It’s not the inflation, it’s the prices?

    Kevin Drum notes that all the anger at Biden for inflation being around 3% is weird as back during the 1984 “Morning in America” BS pulled off by Team Reagan – people were happy even though inflation was 4% back then. He starts with:

    ;The latest hotness about the economy is that people aren’t satisfied with low inflation. They don’t merely want prices to rise more slowly, they want prices to return to their old levels”

    Yea – the Bruce Hall deflationist BS! Kevin blames Faux News which we know Brucie boy watches 24/7.

    1. Not Trampis

      you are not old enough to remember but the reagan aides wanted Volker replaced because getting inflation down below 4% involved too many costs to the economy.

      1. pgl

        Oh I remember this all too well. The notion that Reagan and Volcker joined forces to lower inflation is a right wing lie. Volcker was trying to signal the White House that if they backed off the excessive fiscal stimulus the FED would then lower interest rates. The CEA tried to tell the Reagan political types this was a good idea but it seems no one else in that White House had a clue.

  5. pgl

    PPI deflation?

    The Producer Price Index for final demand fell 0.5 percent in October, seasonally adjusted, after
    advancing 0.4 percent in September, the U.S. Bureau of Labor Statistics reported today. (See
    table A.) The October decline is the largest decrease in final demand prices since a 1.2-percent
    drop in April 2020. On an unadjusted basis, the index for final demand rose 1.3 percent for the
    12 months ended in October. In October, the index for final demand goods fell 1.4 percent. Prices for final demand services
    were unchanged.

  6. pgl

    “And 10 year Treasury yields, from TradingEconomics.”

    A 17 basis point decline in just one day is quite the event. Now before anyone of the kiddie’s corner asks whether this is a good thing, let me suggest that the market is signaling that the FED will back off from its tight money as inflation seems to be subsiding. Now I would call that a good thing but I’m someone from the kiddie’s corner will attack me as a lackey for the bankers or something else even dumber.

  7. pgl

    My Pillow in trouble? Call Steve Bannon!


    Steve Bannon is helping MyPillow CEO Mike Lindell promote major sales as his friend struggles to pay off legal fees from his election lawsuits and his company faces financial hardships that have crippled operations. Lindell, an avid supporter of former President Donald Trump, appeared on Bannon’s War Room podcast Tuesday to promote early Black Friday sales that include some of the “lowest [prices] in history.” He also thanked his supporters who have helped keep MyPillow afloat “in this time of trouble that we’ve been in.” Bannon chimed in after Lindell’s pitch, saying, “We want to keep hammering” the promotion information and urging listeners to “keep those operators up” with new orders. “I have no money personally. Nothing left, nothing left,” Lindell told Minneapolis TV station KARE in October. “And during this time, we can’t pay lawyers. We can’t pay lawyers a couple of million dollars a month…. I can’t go get the money.” Newsweek reached out to MyPillow and Bannon’s War Room via email for comment. Lindell and his company have been hit with several multimillion-dollar lawsuits over his baseless claims that rigged voting machines contributed to fraud in the 2020 presidential election. A court in Minnesota allowed Lindell’s lawyers to withdraw from representing him after his attorneys noted that he would “be unable to pay for future fees and costs.” MyPillow’s credit line was cut by American Express in September, a decision that Lindell has said was made because of Trump’s lead in the GOP nomination contest. A spokesperson for American Express previously refuted those claims, telling Newsweek the company “does not make customer decisions based on personal views or political affiliations.” Lindell’s company has struggled in the wake of the 2020 election. It was forced to switch to direct sales after a number of major retailers, like Walmart and Bed, Bath & Beyond, dropped MyPillow’s products because of Lindell’s election fraud claims. In July, MyPillow auctioned off more than 700 pieces of company equipment as part of its move toward a direct-to-consumer approach. MyPillow has launched not only early Black Friday sales, which offer more than 40 percent discounts on bedsheets and pillows, but also the company’s “biggest Christmas sale ever.”

    You could discount Lindell’s trash by 80% and I still would not buy any of it.

  8. pgl

    Trump’s own accounting expert admitted Trump used highly misleading statements:


    Trump’s own fraud-trial expert testifies about ‘glaring’ problems in his financial statements — but blames the accountants.

    Read the entire story as the frauds Trump abused were beyond transparent.

Comments are closed.