Four of the five steps down:
Figure 1: Fast inflation for core CPI (blue), core CPI (tan), supercore CPI (pink), PPI core (red), and PCE core (green), by Eeckhout ( 2023), T=12, a=4. June PCE core is now live from 7/23. Source: BLS, BEA, Cleveland Fed, and author’s statistics.
While the immediate PPI peaked in June, regressing the core CPI on the lagged core PPI and the core CPI (all immediate) on the data shown above reveals a statistically insignificant coefficient on the lagged PPI. This is true even using m/m inflation.
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