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Govt Shutdown Skews Inflation Data for Fed
8 Jan
Summary
- October inflation data uses September and November CPI averages.
- Government shutdown prevented full October CPI data collection.
- Delayed PCE inflation data set for January 22 release.
Inflation estimates used by the Federal Reserve for monetary policy are being adjusted due to the recent government shutdown. The Bureau of Economic Analysis announced it will use an average of September and November Consumer Price Index (CPI) data to produce its October estimates. This measure is necessary because the Bureau of Labor Statistics could not fully publish October's CPI data. The shutdown hindered data collection, with no possibility for retroactive completion.
The personal income and outlays report for October will incorporate these averaged CPI figures. This report relies on CPI data to adjust consumer spending statistics for price changes, forming the Personal Consumption Expenditures Price Index. Economists noted that the missing October CPI data contributed to the observed moderation in annual consumer inflation reported in November.
With the delayed collection for the November report also a factor, the comprehensive PCE inflation data for both October and November is now expected on January 22. The CPI itself saw a year-over-year increase of 2.7% in November, down from 3.0% in the twelve months ending in September.
