Reader Bruce Hall disparages the use of the PCE deflator for deflating…PCE (Personal Consumption Expenditures) from the NIPA. OK, it’s true that the PCE deflator uses business facing prices, rather than consumer facing prices. Mr. Hall suggests using the CPI. But that has different weights. (It doesn’t make sense to apply a price index with CPI weights to an aggregate with PCE weights — read some price index theory if that is confusing). What to do? What to do?
Author Archives: Menzie Chinn
CPI and PCE Deflator Differential and Differences – Edition LXVII
Reader Bruce Hall writes:
Employment Situation: Slower Employment, Wage, Aggregate Hours Growth
From the Employment Situation Release:
Business Cycle Indicators in March/April: Deceleration?
With the employment situation release, we have a first reading on April conditions.
Consumption per capita Relative to Trend
Are you better of than you expected four years ago? I use trend growth 2016-2019 to figure out what is “expected”.
Guest Contribution: “Elections and Devaluations”
Today, we present a guest post written by Jeffrey Frankel, Harpel Professor at Harvard’s Kennedy School of Government, and formerly a member of the White House Council of Economic Advisers. A shorter version appeared at Project Syndicate. He thanks Sohaib Nasim for research assistance.
Are You Better Off than You Were Five Years Ago?
Reader Steven Kopits writes in response to Are you better off than you were four years ago?:
Decomposing Sentiment
Republicans and lean Republican respondents really, really, really don’t like economic conditions right now, switching “bigly” upon Trump’s election, contributing an outsize impact on the overall University of Michigan consumer sentiment index. Democrats and lean Democratic respondents think things are about the same as mid-2016 (under Obama).
Are You Better Off than You Were Four Years Ago?
GDP per capita, consumption per capita, disposable income per capita, unemployment, economic policy uncertainty, VIX, and Misery Index — plus median household income.
Confidence, Sentiment, and News in April: Some Time Series
Sharp reactions to Conference Board consumer confidence index today. Here’s some context for this movement, as well as that in the U.Michigan survey of economic sentiment.