One Good Footnote Is Worth a Million CPI Guesses
As fun as it is to play “inflation detective” every month, there’s room for government statisticians to leave a few more clues.
When inflation was easy. Fed Chair Jerome Powell at an event in New York in 2017.
Photographer: Michael Nagle/Bloomberg via Getty Images
The Bureau of Labor Statistics is in a bit of hot water. As my Bloomberg colleague Matthew Boesler reported Wednesday, an apparently retracted note to government-data “super users” provided what was ostensibly novel information about the recent month-on-month jump in reported US inflation. Of course, if you ask me, the real problem started with poor communication on the day of the last CPI release. Which contained a completely unexplained statistical mystery. Which led analysts to seek answers from the statistics bureau. Which led to an embarrassing email and a follow-up clarification. Which still ultimately left most people as confused as ever!
Here’s the basic background: A Feb. 13 report showed core US CPI jumped 0.4% in January from the previous month, exceeding the median estimate in a Bloomberg survey of economists. Financial market participants are laser-focused on even small changes in inflation data these days, and the report fueled the narrative that the disinflation process may be sputtering. Yields on 10-year bonds jumped about 14 basis points on the day and the S&P 500 Index slumped.