Is It Time to Add Food-at-Home Inflation to Measures of Core Inflation?
Since the mid-1970s, the Federal Reserve has used core inflation to examine trends in underlying inflation. Core inflation is considered a more stable measure as it excludes energy and food, historically viewed as the most volatile components of inflation. However, core inflation can be a challenge for central bankers to communicate, as food inflation is highly salient to consumers. We argue that food-at-home inflation has become less volatile over time and could be added to measures of core inflation with few drawbacks.
Monetary Policy
Economic Bulletin
Agriculture
Inflation
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Francisco Scott
José Mustre-del-Río
Amaze Lusompa
Jalen Nichols
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June 6, 2025
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Labor Market Cooling Has Been Uneven Across Industries
The U.S. labor market has cooled over the last two years but remains healthy overall. However, an industry-specific version of the KC Fed’s Labor Market Conditions Indicators (LMCI) suggests pockets of tightness and weakness have appeared in a few industries. Tightness appears to be limited to less labor-intensive industries, limiting upside risk to inflation. Weakness, on the other hand, has appeared in the interest-rate-sensitive information industry, which may be vulnerable to further labor market cooling.
Labor and Demographics
Monetary Policy
Data and Trends
Economic Bulletin
Inflation
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Karlye Dilts Stedman
Emily Pollard
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January 31, 2025
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Maintaining the Anchor: An Evaluation of Inflation Targeting in the Face of COVID-19
Globally, central banks prevented high inflation post-pandemic from becoming embedded in inflation expectations.
Covid-19 Research
Research Working Paper
Monetary Policy
Macroeconomics
Inflation
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Brent Bundick
A. Lee Smith
Luca Van der Meer
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December 20, 2024
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The Passthrough of Agricultural Commodity Prices to Food Prices
Agricultural commodities prices have had a small and uncertain effect on changes in food prices at least since 2008.
Research Working Paper
Agriculture
Inflation
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Francisco Scott
Amaze Lusompa
David Rodziewicz
Cortney Cowley
Jacob Dice
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December 20, 2024
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Cost of Childcare Increasingly Weighs on Labor Force Engagement
Problems attaining childcare have weighed on workers’ engagement in the labor force for some time. A few years ago, pandemic disruptions were the primary culprit in the lower consumption of childcare services. Now, the rising cost of childcare may be to blame. As wage growth moderates, higher childcare costs could place added pressure on households and cause some workers to at least partially disengage from the workforce.
Labor and Demographics
Regional
Economic Bulletin
Inflation
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John McCoy
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October 9, 2024
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Labor Shortages in the Healthcare Sector Have Eased, Which May Soften Price Pressures
Following severe labor shortages during the post-pandemic recovery, employment and wage growth in the healthcare sector have returned to their pre-pandemic trends. The healthcare sector is labor intensive, and inflation in the sector has historically tracked wage growth. Thus, lower wage growth may limit price pressures in the healthcare sector.
Labor and Demographics
Macroeconomics
Economic Bulletin
Inflation
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Johannes Matschke
Emily Pollard
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August 16, 2024
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Heterogeneity in Household Inflation Expectations and Monetary Policy
A tightening in monetary policy can lower inflation expectations even among households whose expectations are especially high.
Quantitative Methods
Research Working Papers
Monetary Policy
Macroeconomics
Inflation
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Taeyoung Doh
JiHyung Lee
Woong Yong Park
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July 15, 2024
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Housing Services Inflation May Decline Only Gradually
The inflation rate for housing services remains about 2 percentage points above its 2019 level. Several factors are likely to slow its decline, including more than a decade of underbuilding prior to the pandemic, limited capacity to increase the nation’s housing stock, and the limited number of homes available for sale due to the steeper mortgage rates owners would face if they sold and purchased a different home.
Housing
Economic Bulletin
Inflation
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Jordan Rappaport
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June 24, 2024
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Despite High Inflation, Longer-Term Inflation Expectations Remain Well Anchored
The Federal Reserve’s long-run 2 percent inflation target is intended to prevent periods of high inflation from becoming embedded in longer-term inflation expectations. However, inflation has remained above the Fed’s target for over three years, increasing the risk that longer-term inflation expectations could become unanchored. Building on our previous research, we study recent market reactions to inflation news and find that longer-term inflation expectations appear to remain well anchored.
Monetary Policy
Economic Bulletin
Inflation
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Brent Bundick
A. Lee Smith
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May 31, 2024
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Labor Market Shocks and Monetary Policy
Worker mobility played a key role in shaping inflation dynamics during the Great Recession and COVID-19 recoveries.
Quantitative Methods
Covid-19 Research
Research Working Paper
Monetary Policy
Macroeconomics
Inflation
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Serdar Birinci
Fatih Karahan
Yusuf Mercan
Kurt See
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May 6, 2024
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