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Residual Seasonality in Some Components of PCE Inflation

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  • James Hamlette
  • Kurt Graden Lunsford

Abstract

Policymakers and economists sometimes examine the components of inflation to better understand inflation’s behavior. We study the primary components of core PCE inflation for evidence of residual seasonality. To do this, we examine the average one-month percent changes in three categories of seasonally adjusted price data that have been discussed by policymakers: goods excluding food and energy, services excluding energy and housing, and housing. Inflation for goods excluding food and energy and services excluding energy and housing tends to be economically and statistically higher in January than in November and December. Housing inflation does not exhibit residual seasonality. When assessing if inflation has been high or low over short stretches of time, policymakers and economists may want to account for residual seasonality in goods excluding food and energy and services excluding energy and housing.

Suggested Citation

  • James Hamlette & Kurt Graden Lunsford, 2026. "Residual Seasonality in Some Components of PCE Inflation," Economic Commentary, Federal Reserve Bank of Cleveland, vol. 2026(04), pages 1-6, March.
    • Handle: RePEc:fip:fedcec:102869
    DOI: 10.26509/frbc-ec-202604
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    References listed on IDEAS

    as
    1. Kurt Graden Lunsford, 2025. "Residual Seasonality in Five Measures of PCE Inflation," Economic Commentary, Federal Reserve Bank of Cleveland, vol. 2025(03), pages 1-6, March.
    2. Ekaterina V. Peneva, 2014. "Residual Seasonality in Core Consumer Price Inflation," FEDS Notes 2014-10-14, Board of Governors of the Federal Reserve System (U.S.).
    3. Ekaterina V. Peneva & Nadia Sadee, 2019. "Residual Seasonality in Core Consumer Price Inflation: An Update," FEDS Notes 2019-02-12-2, Board of Governors of the Federal Reserve System (U.S.).
    4. Benjamin Pyle & Glenn D. Rudebusch & Daniel J. Wilson, 2015. "Residual seasonality and monetary policy," FRBSF Economic Letter, Federal Reserve Bank of San Francisco.
    5. Kurt Graden Lunsford, 2017. "Lingering Residual Seasonality in GDP Growth," Economic Commentary, Federal Reserve Bank of Cleveland, issue March.
    6. Todd E. Clark & Matthew V. Gordon & Saeed Zaman, 2025. "Forecasting Core Inflation and Its Goods, Housing, and Supercore Components," International Journal of Central Banking, International Journal of Central Banking, vol. 21(4), pages 351-403, October.
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