Ecoinometrics - Core inflation vs headline
Inflation is slowly easing but the core is sticky.
On one hand inflation eased a little in August. On the other hand you might have noticed that most markets crashed hard on that news.
So what gives?
Of course the issue is that while headline inflation was down, core inflation was up. That's not what people expected.
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Core inflation vs headline
Let's start with a reminder. Inflation is the rate of change of the Consumer Price Index. Typically it is expressed on a year over year basis.
The Consumer Price Index is an aggregate of prices for different items in a reference basket of products and services.
That means by selecting subsets of this basket you can make up different sub-indices of the consumer price index to emphasize different sectors of the economy.
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