What Is Driving Inflation—Besides the Usual Culprits?

Christopher Cotton and Vaishali Garga

Current Policy Perspectives from Federal Reserve Bank of Boston

Abstract: The prices of services associated with low-skill workers have been a key driver of “supercore” inflation, which excludes food, energy prices, and shelter prices. Low-skill-services inflation seems to be tied to faster wage growth in those industries coming out of the COVID-19 pandemic. Wage growth in low-skill services has begun to decline, suggesting that there may be lower inflation in these industries going forward. At the same time, wage growth in high-skill services has recently accelerated, suggesting that there may be higher inflation in these industries in the near future.

Keywords: Inflation; CPI; supercore (search for similar items in EconPapers)
JEL-codes: E31 E50 E66 (search for similar items in EconPapers)
Pages: 9
Date: 2023-07-13
New Economics Papers: this item is included in nep-ger and nep-mon
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