Residual Seasonality in Monthly Core Inflation

Abstract: At the end of 2023, three-month average core CPI inflation came in at 3.6 percent annualized. However, January and February 2024 core CPI inflation came in at 4.8 percent annualized. Given the volatility in monthly inflation numbers, one should not take too much signal from one or two months of data. Furthermore, the possibility has been raised that there is a regular but transient inflation uptick early in the year, even in seasonally adjusted data. In this article, I show that, for the last 20 years, there is no statistical evidence for this kind of residual seasonality in monthly core CPI or PCE inflation.

Keywords: inflation; seasonality;

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Bibliographic Information

Provider: Federal Reserve Bank of Richmond

Part of Series: Richmond Fed Economic Brief

Publication Date: 2024-05

Volume: 24

Issue: 13