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Consumer Price Index: Difference between revisions
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== Definitions == | |||
Headline: | |||
Core: | |||
==== Supercore: ==== | |||
In a speech on November 30,2022 Fed Chair Powell referred to services less shelter as a major category of focus due to the close relationship with wages. | |||
''"Finally, we come to core services other than housing. This spending category covers a wide range of services from health care and education to haircuts and hospitality. This is the largest of our three categories, constituting more than half of the core PCE index. Thus, this may be the most important category for understanding the future evolution of core inflation. Because wages make up the largest cost in delivering these services, the labor market holds the key to understanding inflation in this category."'' <ref>https://www.federalreserve.gov/newsevents/speech/powell20221130a.htm</ref> | |||
==Weighing of CPI components== | ==Weighing of CPI components== | ||
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Shelter CPI is the biggest component in the core CPI for the US. The weighted shelter takes up 32.77% of CPI, of which 7.8% is rent and 23.68% is private housing, | Shelter CPI is the biggest component in the core CPI for the US. The weighted shelter takes up 32.77% of CPI, of which 7.8% is rent and 23.68% is private housing, | ||
*Home prices have started to decline since July 2022<ref>https://tradingeconomics.com/united-states/case-shiller-home-price-index-mom</ref>, but due to the lagging shelter CPI data, this will start to be reflected in CPI until the second half of 2023. | *Home prices have started to decline since July 2022<ref>https://tradingeconomics.com/united-states/case-shiller-home-price-index-mom</ref>, but due to the lagging shelter CPI data, this will start to be reflected in CPI until the second half of 2023. | ||
*The S&P CoreLogic Case-Shiller price index in the US rose 2.5% year-on-year in January of 2023, the smallest increase since November of 2019, following a 4.6% rise in December<ref name=":2">https://tradingeconomics.com/united-states/case-shiller-home-price-index-yoy</ref> | *The S&P CoreLogic Case-Shiller price index in the US rose 2.5% year-on-year in January of 2023, the smallest increase since November of 2019, following a 4.6% rise in December<ref name=":2">https://tradingeconomics.com/united-states/case-shiller-home-price-index-yoy</ref> | ||
*The S&P CoreLogic Case-Shiller price index in the US declined 0.6% month-over-month in January of 2023, a seventh consecutive decline. <ref>https://tradingeconomics.com/united-states/case-shiller-home-price-index-mom</ref> | *The S&P CoreLogic Case-Shiller price index in the US declined 0.6% month-over-month in January of 2023, a seventh consecutive decline. <ref>https://tradingeconomics.com/united-states/case-shiller-home-price-index-mom</ref> | ||