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Residual Seasonality in Five Measures of PCE Inflation

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  • Kurt Graden Lunsford

Abstract

I document residual seasonality in five measures of PCE inflation: headline, core, market-based core, median, and trimmed mean. While these measures are all computed from seasonally adjusted data, I show that each of these measures has had low average monthly inflation in November and December and high average monthly inflation in January from 1987 through the beginning of 2025. The difference in inflation rates from November and December to January is economically and statistically significant. This timing for residual seasonality often gives the impression that monthly inflation is low at the end of the calendar year and jumps to start the year.

Suggested Citation

  • 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.
    • Handle: RePEc:fip:fedcec:99732
    DOI: 10.26509/frbc-ec-202503
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    References listed on IDEAS

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    1. Daniel Dzikowski & Carsten Jentsch, 2024. "Structural Periodic Vector Autoregressions," Papers 2401.14545, arXiv.org.
    2. Victoria Consolvo & Kurt Graden Lunsford, 2019. "Residual Seasonality in GDP Growth Remains after Latest BEA Improvements," Economic Commentary, Federal Reserve Bank of Cleveland, issue April.
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