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2018-09-14Macro `n Cheese


A break-down of the upcoming (28 Sept) personal consumption expenditure deflator

Over the last couple of months, US wages and prices have started to move (more or less) jointly upwards indicating that the long-heralded inflationary pressures are – hopefully – building. In today’s high chart to text-ratio post Roger has gotten some help from Alexander Pelle, at our NY-office, to make a real clever break-down of the upcoming (28 Sept) personal consumption expenditure deflator.

Charts for a rainy day

We have a lot of talented people in our firm. And a while ago, one of them, Alex, had produced a presentation document with a number of interesting graphs on developments of the FED’s preferred target the (core) private consumption expenditure deflator. Now, there were a lot more graphs in the document he produced, but here I would like to point you to the ones that I found most interesting from a user perspective. In some instances, I have also made minute changes to the graphs, mainly to get an extra layer of usability. Anyhow, here’s the first one.


With the help of the above graph, as soon as BEA has supplied the underlying tables, i.e., normally within a few minutes of the PCE-release, you will be able to make a quite far-reaching analysis of what is driving the PCE-core inflation measure. Not only that, you can also make a swift comparison on how the latest outcome compares to the previous outcomes to address marginal changes in PCE core inflation.
In addition, when analysts comment on an outcome we normally like to make some reference to how it relates to historical outcomes. To do this swiftly, I think this graph is a real thing of beauty (in the document you can also chose a layout with z-scores etc.).


And then, as a final treat, Alex has also constructed a graph where we can compare and reconcile PCE and CPI data in order to identify what deviations, if any, there are between the two most used measures of price developments – no mean feat if you ask me!


In time, we should be able to bring more of these handy tools to our MB users, so stay tuned!



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We don’t usually have views and opinions about economic and financial states of affairs, (not ones that we express publicly as a company, anyway). We do believe, however, that people can and do appreciate a variety of perspectives. What you’ve just read is the perspective of our resident chief economist. While we think he’s very smart, Macrobond Financial does not expressly endorse the views he presents here. And, as the old adage goes, you shouldn’t believe everything you read (not without finding the data, performing a few analyses and presenting it in a nice chart). We want to make it clear that we are not offering this information as investment advice. That being said, if you have the application you can easily check everything that’s mentioned here, and decide for yourself. If you don’t have the application, now you have a great reason to get it.