Relative Price Changes Are Unlikely to Account for Recent High Inflation

Abstract: March 2021 marked the first month of the ongoing high inflation episode in the U.S. Last September, I analyzed the first five months of this episode through the lens of the distribution of price changes for all PCE components. A small fraction of expenditures accounted for much of the high inflation in those months. In this Economic Brief, I provide a related analysis and incorporate a new summary statistic for the distribution of relative price changes. In the last four months, high inflation has not been concentrated in a small fraction of expenditures, deviating from the relationship we had largely seen in post-1994 data.

Keywords: PCE; inflation;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2022-03

Volume: 22

Issue: 10