Core Inflation Measures and Statistical Issues in Choosing Among Them Mick Silver IMF Working Paper April 2006 http://www.imf.org/external/pubs/ft/wp/2006/wp0697.pdf
In our latest white paper, Senior Portfolio Manager Duane McAllister explains how the recent boost in short - term yields not only allows investors to once again earn a reasonable nominal return on their money without needing to take significant duration risk, it also provides an opportunity to earn a positive real return, since
core inflation measures remain below the Fed's 2.0 % target.
What you are seeing now with
core inflation measures that are below headline inflation, and where they have been drifting down, is just a reflection of the excess capacity we have had over the last year.
However,
our core inflation measures are all in the lower half of the target band and have been trending downward.
However, prices of services were only 1.0 percent higher, compared with a 1.5 percent increase in March
Core inflation measures of inflation, which the ECB also looks to as a guide, were also below expectations.
The core inflation measure that many market economists look at, which also excludes the prices of alcohol and tobacco, also slipped to 0.7 percent from 1.0 percent in March.
Firming healthcare inflation should support the aggregate
core inflation measure despite the more muted trends in core goods.
The Singapore central bank's
core inflation measure rose 1.5 per cent, slightly lower than the 1.6 per cent increase in May.
Bill King points out: «Targeted inflation may be the headline CPI, or a derived
core inflation measure.
Not exact matches
BoC Governor Mark Carney feels he doesn't have to raise rates because
inflation, as
measured by the
core Consumer Price Index (CPI) is still within target.
He said the central bank will be spending time on investigating whether there is a better way to
measure trend
inflation than the
core rate policy makers follow now.
The Federal Reserve's preferred
measure of U.S.
inflation, the
core personal consumption expenditures index, is seen stuck at 1.6 % for the year to September, exactly where it has been since March.
As the economy continues its rocky recovery, policy - makers are quick to point out that
core inflation, the key
measure upon which the Bank of Canada depends to set monetary policy and stave off destabilizing devaluations of currency, remains in check.
The report also said the average of the Bank of Canada's three
measures of
core inflation, which are designed to leave out the noise of more - volatile items like gasoline, was two per cent last month.
The
core PCE index is the Federal Reserve's preferred
inflation measure.
The
core PCE index is the Fed's preferred
inflation measure.
The «
measures» to which Poloz refers above are the three gauges of
core inflation the central bank adopted last autumn to give it better view on where prices are headed.
The
core PCE price index is the Federal Reserve's preferred
measure of
inflation.
In this sense, these
core measures of
inflation act as an operational guide to help the Bank achieve the total CPI
inflation target.
Although a number of temporary factors are keeping headline
inflation near its 2 per cent target, our
measures of
core inflation are in the lower half of the target band and have been trending downward in recent quarters.
The Bank's three
measures of
core inflation, taken together, continue to point to material excess capacity in the economy.
Measures of
core inflation remain close to 2 per cent as the effects of past exchange rate depreciation and excess capacity continue to offset each other.
The Bank also monitors a set of «
core»
inflation measures that allow the Bank to «look through» temporary changes in total CPI and focus on the underlying trend of
inflation.
The Bank's three
measures of
core inflation remain below two per cent and wage growth is still subdued, consistent with ongoing excess capacity in the economy.
And indeed here in the United States we look at a range of different
measures of
core inflation, for example, that take energy and food prices out of the overall index.
Measures of
core inflation should remain close to 2 per cent.
Central bankers rely on the
core personal consumption expenditures (PCE) index to
measure inflation.
Measures of
core inflation remain close to 2 per cent, reflecting the offsetting influences of past exchange rate depreciation and excess capacity.
Inflation as
measured by the
core personal consumption expenditures price index jumped to 1.5 percent in the first quarter, government figures showed on Thursday, a jump from 0.4 percent the prior quarter.
The monthly data series includes the latest estimate of
core PCE
inflation, which is the Fed's preferred
measure of price growth.
Another point to remember is that swings in commodity prices can affect the normal relationship between the total
inflation rate and the
core measure of
inflation that we use as an operational guide.
Deputy Governor Lawrence Schembri discusses the uses and
measures of
core inflation in the conduct of monetary policy.
Given these complications, the Bank is looking at how we
measure core inflation as part of our regular review of our
inflation - targeting regime.
Next year, we will answer the question of whether the Bank should continue to focus on one pre-eminent
measure of
core inflation and, if so, whether our current
core measure will remain in that role.
Our new
measures of
core inflation are all below 2 per cent presently, weighed down by excess capacity in the economy.
Euro zone
inflation eased in June because of more moderate energy price rises, but the slowdown was less than expected by markets and the
core measure of price growth the ECB keenly watches increased by more than anticipated.
Moreover,
core inflation moved ahead of its level of 6 months ago, and leading economic
measures continued to slip (though we don't see them as being indicative of recession risk at present).
Core PCE is the Fed's preferred
measure of
inflation.
The
core Personal Consumption Expenditure Price Index, the Fed's favored
measure of
inflation, rose 1.4 % over the year.
Average
core inflation for all of 2013, a
measure that excludes the volatile price of fresh food, was 0.4 per cent, according to the interior ministry.
Various
measures of
core or underlying
inflation, which are less affected by these temporary factors, are also gradually increasing, and over the year to September were around 2 per cent.
Headline and
Core CPI tend to be reported on the news, however the CPI - W is more important to retirees than these two
measures of
inflation.
Various
core measures of
inflation point also to a gradual increase.
Core Inflation is a measure of inflation that excludes certain items that face volatile price m
Inflation is a
measure of
inflation that excludes certain items that face volatile price m
inflation that excludes certain items that face volatile price movements.
Core inflation eliminates products that can have temporary price shocks because these shocks can diverge from the overall trend of
inflation and give a false
measure of
inflation.
But in recent months both overall and
core inflation have come down along with market and survey
measures of
inflation expectations.
Inflation measures for November were mixed, with a broad increase in producer prices but a moderation in the annual increase in the
core Consumer Price Index, which fell a tenth to 1.7 %.
After a run of weak
inflation reports stretching back several months, there was a slight uptick in the October reading of the Fed's favored
inflation measure, the
core personal consumption expenditures price index.
The Fed's preferred
measure of
inflation,
core personal consumption expenditures (PCE), is stuck below 1.50 %.
Measures of
core inflation have edged up in recent months, reflecting the continued absorption of economic slack.