EconPapers    
Economics at your fingertips  
 

Why Are Headline PCE and Median PCE Inflations So Far Apart?

Daniel Carroll and Ross Cohen-Kristiansen

Economic Commentary, 2020, vol. 2020, issue 24, 6

Abstract: Mean (or headline) PCE inflation has typically fallen below median PCE inflation, and since 2012 the difference has been large. To understand the reasons for this trend, we investigate which components of the headline measure are contributing to the difference. We find that energy components, which frequently undergo wide price swings, and electronics, which have been steadily decreasing in price for decades, explain most of the difference between the two inflation measures. We argue that the outsized impacts of such components on headline PCE inflation reinforce the need for policymakers to consider both headline and median PCE inflation measures.

Keywords: inflation; measurement (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://doi.org/10.26509/frbc-ec-202024 Full Text (text/html)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (https://doi.org/10.26509/frbc-ec-202024 [302 Found]--> https://www.clevelandfed.org/publications/economic-commentary/ec-202024-headline-and-median-pce-gap)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:fip:fedcec:88825

Ordering information: This journal article can be ordered from

DOI: 10.26509/frbc-ec-202024

Access Statistics for this article

More articles in Economic Commentary from Federal Reserve Bank of Cleveland Contact information at EDIRC.
Bibliographic data for series maintained by 4D Library ().

 
Page updated 2023-01-26
Handle: RePEc:fip:fedcec:88825