A BIG gift for you
Easter’s Almost Here – and We’ve Got a Big Gift for You!
Some big (and bumpy) CPI numbers are on the way over the next few months, so it will be helpful to quickly convert CPI to PCE. That’s why we built a handy Excel tool that does just that — no need to ping us for the translation anymore, you can do it yourself as soon as the data drops.
Just one thing: you’ll need to have Macrobond to use it. We got the green light to share it with clients, but only if you’ve got a Macrobond license — otherwise, it’s a no-go because of license rules.
Figure 1 shows the main tab of the Excel file, including our current translation for March (7bps for core PCE, and 0bps for headline PCE). Figure 2 shows the translation errors: the absolute mean error is 3bps for core and less than 2bps for headline PCE.
(Note: we left out Jan-Feb-Mar from the translation errors, as the current PCE vintage does not reflect the new PPIs yet)
Accurately translating CPI into PCE is inherently challenging, given that certain details published by the BEA remain unknown at the time of estimation. As such, we intend to continue refining this Excel tool over time. That said, the current version already delivers solid performance, as evidenced by Table 2. Please, keep in mind that: (i) Using the file is straightforward — simply click “Refresh” — but it’s important to carefully read the instructions to fully understand how the tool works, (ii) We’re unable to share the file broadly with all clients. If you’re interested, please reach out to us directly at riccardo.trezzi@underlyinginflation.com. We’ll compile a list of interested users and follow up accordingly.
And Happy Easter!
Figure 1. Main tab of CPI to PCE translation Excel file.
Figure 2. CPI to PCE translation errors.
