Inflation Runs
Inflation
Looking for CPI Category Persistence
- I’m hunting for more signs of where inflation might be going
- Rather than look at ACFs, I’m exploring runs; i.e. consecutive m/m deltas of the same sign
- Food & Beverage and Medical Care are stand out.
- Inflation is the norm (no surprise)
- Deflation is virtually absent in certain categories (e.g. Food away from home)
- Runs for food inflation can last as long as 200mths
- The dynamics for Medical Care are similar
- Meanwhile, housing, apparel, transportation, and Education & Communication are more balanced
- For consumers/businesses with input pricing along these latter categories, declining unit costs has indeed been seen
