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Federal Reserve Bank of Dallas
Working Papers
Two Measures of Core Inflation: A Comparison
James Dolmas
Evan F. Koenig

Trimmed-mean Personal Consumption Expenditure (PCE) inflation does not clearly dominate ex-food-and-energy PCE inflation in real-time forecasting of headline PCE inflation. However, trimmed-mean inflation is the superior communications and policy tool because it is a less-biased real-time estimator of headline inflation and because it more successfully filters out headline inflation’s transitory variation, leaving only cyclical and trend components.

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James Dolmas & Evan F. Koenig, Two Measures of Core Inflation: A Comparison, Federal Reserve Bank of Dallas, Working Papers 1903, 25 Feb 2019.
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Keywords: inflation; trimmed mean; labor market slack; real-time data
DOI: 10.24149/wp1903
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