We produce indicators and datasets to inform the public, policymakers, and researchers about economic conditions, including inflation, employment, and risks to the financial system.
Visit our Center for Inflation Research for all things inflation—from general information on how inflation works and why it matters to the latest data and analysis on current inflationary trends.
Our research informs the public and policymakers by examining economic issues of importance to those in our local communities, across the nation, and around the world.
We publish research and analyses to keep audiences informed of economic trends in our region and nationwide. View latest releases or explore our archive.
Visit our Center for Inflation Research for all things inflation—from general information on how inflation works and why it matters to the latest data and analysis on current inflationary trends.
We represent and gather information from the Fourth Federal Reserve District, spanning Ohio and parts of Pennsylvania, West Virginia, and Kentucky. These resources are useful for our region, the communities we serve, and communities across the United States.
Learn about our work to advance understanding of economic trends affecting the Fourth District.
The Cleveland Fed offers numerous resources to promote economic opportunity for residents across our region.
Hear from local leaders and community development experts about economic problems their communities face and the solutions they are putting forth.
Looking for the Fed’s work on a particular subject? Narrow your search to the areas that interest you.
Learn economic basics, dive into inflation, and get educational resources and games for yourself or to share with others.
Explore the latest educational resources from the Cleveland Fed—from interactive articles and video explainers to games and virtual exhibits.
Looking for fun, informative ways to learn or teach economics and finance? Browse the Fed’s suite of educational programs and resources.
Visit us virtually or in person to learn more about our history and our ongoing work to promote financial literacy throughout our region.
We supervise and regulate financial institutions, support American consumers’ financial security, and maintain the financial stability and payment systems for the US Treasury.
The Cleveland Fed provides a range of tools for tracking trends in the lending environment.
Learn about the resources we offer to help people in the community navigate the financial system.
Understand the various requirements for Fed-chartered financial institutions and discover the range of services available to them—from cash services and reserve balance data to the discount window.
Find out how the Cleveland Fed supervises and regulates member banks to ensure financial-system stability and support the US Treasury.
We serve the American people as part of the US central bank. We support the US economy and our region by studying economic conditions and issues that impact our communities, serving financial institutions, and providing economic education and resources for all.
Meet the individuals leading our mission, including the president and executive leadership team, advisory council members, and the boards of directors of each Cleveland Fed branch.
Community outreach is central to the Fed’s mission. Find out about new programs, upcoming events, and other ways to connect with us.
The Fed does far more than inform monetary policy. Learn about the mission, structure, and role of our organization, both regionally and nationally.
We have a long-standing commitment to diversity, equity, inclusion, and opportunity for our employees and the communities we serve.
We produce indicators and datasets to inform the public, policymakers, and researchers about economic conditions, including inflation, employment, and risks to the financial system.
Visit our Center for Inflation Research for all things inflation—from general information on how inflation works and why it matters to the latest data and analysis on current inflationary trends.
Our research informs the public and policymakers by examining economic issues of importance to those in our local communities, across the nation, and around the world.
We publish research and analyses to keep audiences informed of economic trends in our region and nationwide. View latest releases or explore our archive.
Visit our Center for Inflation Research for all things inflation—from general information on how inflation works and why it matters to the latest data and analysis on current inflationary trends.
We represent and gather information from the Fourth Federal Reserve District, spanning Ohio and parts of Pennsylvania, West Virginia, and Kentucky. These resources are useful for our region, the communities we serve, and communities across the United States.
Learn about our work to advance understanding of economic trends affecting the Fourth District.
The Cleveland Fed offers numerous resources to promote economic opportunity for residents across our region.
Hear from local leaders and community development experts about economic problems their communities face and the solutions they are putting forth.
Looking for the Fed’s work on a particular subject? Narrow your search to the areas that interest you.
Learn economic basics, dive into inflation, and get educational resources and games for yourself or to share with others.
Explore the latest educational resources from the Cleveland Fed—from interactive articles and video explainers to games and virtual exhibits.
Looking for fun, informative ways to learn or teach economics and finance? Browse the Fed’s suite of educational programs and resources.
Visit us virtually or in person to learn more about our history and our ongoing work to promote financial literacy throughout our region.
We supervise and regulate financial institutions, support American consumers’ financial security, and maintain the financial stability and payment systems for the US Treasury.
The Cleveland Fed provides a range of tools for tracking trends in the lending environment.
Learn about the resources we offer to help people in the community navigate the financial system.
Understand the various requirements for Fed-chartered financial institutions and discover the range of services available to them—from cash services and reserve balance data to the discount window.
Find out how the Cleveland Fed supervises and regulates member banks to ensure financial-system stability and support the US Treasury.
We serve the American people as part of the US central bank. We support the US economy and our region by studying economic conditions and issues that impact our communities, serving financial institutions, and providing economic education and resources for all.
Meet the individuals leading our mission, including the president and executive leadership team, advisory council members, and the boards of directors of each Cleveland Fed branch.
Community outreach is central to the Fed’s mission. Find out about new programs, upcoming events, and other ways to connect with us.
The Fed does far more than inform monetary policy. Learn about the mission, structure, and role of our organization, both regionally and nationally.
We have a long-standing commitment to diversity, equity, inclusion, and opportunity for our employees and the communities we serve.
Updated each business day.
About inflation nowcasting
For further information please contact CLEV Public Information.
Note: If the cell is blank, it implies that the actual data corresponding to the quarter for that inflation measure have already been released.
Year: Quarter
Year: Month
Year: Month
The Federal Reserve Bank of Cleveland provides daily “nowcasts” of inflation for two popular price indexes, the price index for personal consumption expenditures (PCE) and the consumer price index (CPI). Nowcasts are estimates or forecasts of the present. The Cleveland Fed produces nowcasts of the current period’s rate of inflation—inflation in a given month or quarter—before the official CPI or PCE inflation data are released. These forecasts can help to give a sense of where inflation is now and where it is likely to be in the future.
Our inflation nowcasts are produced with a model that uses a small number of available data series at different frequencies, including daily oil prices, weekly gasoline prices, and monthly CPI and PCE inflation readings. The model generates nowcasts of monthly inflation, and these are combined for nowcasting current-quarter inflation. As with any forecast, there is no guarantee that these inflation nowcasts will be accurate all of the time. But historically, the Cleveland Fed’s model nowcasts have done quite well—in many cases, they have been more accurate than common benchmarks from alternative statistical models and even consensus inflation nowcasts from surveys of professional forecasters.
Nowcasting is a combination of two terms: “now” and “forecasting.” Economic indicators are often released with a considerable delay, but there is usually intense interest in knowing what a given indicator is before its official release. Nowcasting refers to the prediction of the present, the very recent past, and the very near future—in essence, trying to fill in that missing data point with an accurate estimate. Often, nowcasts take advantage of higher-frequency data that are informative about some other economic indicator to predict what the next release of the indicator of interest will say.
Inflation is a topic of perennial interest because it influences the behavior and plans of consumers, businesses, financial markets, pension funds, governments—in essence, everyone in an economy. The Federal Reserve pays close attention to inflation because of its impact on the economy and because the Federal Open Market Committee has been explicitly tasked by Congress through the Federal Reserve Act to promote the goals of maximum employment and price stability, the so-called “dual mandate.” When making decisions, consumers and businesses may have to forecast the inflation rate far into the future. For example, if a consumer is thinking about taking out a loan, it helps to know how quickly wages and prices will be rising during the life of the loan—after all, it will be much easier to service the loan with stronger wage and price growth. Unfortunately, inflation tends to be difficult to predict accurately. But some recent research finds that forecasts of inflation in the future can be improved by having more accurate estimates of near-term inflation, or nowcasts. These nowcasts serve as an important jumping-off point for thinking about where inflation will be in the future.
We generate nowcasts for four inflation measures: (1) inflation in the price index for personal consumption expenditures, more commonly referred to as PCE inflation; (2) inflation in the PCE price index excluding food and energy, also known as core PCE inflation; (3) inflation in the consumer price index (CPI); and (4) inflation in the CPI excluding food and energy, also known as core CPI inflation. The model reports seasonally adjusted, month-over-month inflation rates in these four measures (expressed as nonannualized percent changes) and quarterly inflation rates in these four measures (expressed at seasonally adjusted annualized rates, or SAAR). The model also reports year-over-year inflation rates in these four measures (based on nonseasonally adjusted data for CPI inflation and core CPI inflation and seasonally adjusted data for PCE inflation and core PCE inflation).
Using historical comparisons from 1999 to 2015, inflation nowcasts from the Cleveland Fed’s model have been highly accurate. Our model’s nowcasts easily outperform a variety of nowcasts from alternative statistical models, especially over the course of a month or quarter. But perhaps even more notable is the model’s performance compared with the best available benchmarks: nowcasts from surveys of professional forecasters. The model’s nowcasts for CPI inflation tend to be more accurate than the consensus (average) nowcasts from the Blue Chip Economic Indicators survey. Its nowcasts for CPI and PCE inflation also tend to be more accurate than the median nowcasts from the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters (SPF). These results are somewhat surprising, because professional forecasters can and do use a range of models and judgment to capture the special factors that affect near-term inflation trends, and there is additionally evidence of the wisdom of the masses (or, more formally, the law of large numbers) when making forecasts. Meanwhile, the model’s nowcasts for core inflation tend to be just as accurate as those in the SPF, but the model is available at a daily frequency, while the SPF is released only once per quarter.
Finally, we also compare the model’s inflation nowcasting accuracy with publicly available nowcasts from the Greenbook (the in-depth analysis of economic conditions produced by the Federal Reserve Board of Governors staff for Federal Open Market Committee meetings). While Greenbook nowcasts tend to be highly accurate, they are only released to the public with a five-year lag. The Cleveland Fed’s model nowcasts have historically tended to be quite similar to those in the Greenbook, but they are available in real time, without delay.
Yes, every business day around 10:00 a.m. Eastern time.
In the United States, the Bureau of Labor Statistics (BLS) typically releases the CPI for a given month around the middle of the following month (for example, the January CPI is released around mid-February). The Bureau of Economic Analysis (BEA) typically releases the other major measure of consumer prices, the PCE price index, around the end of the following month (for example, the January PCE price index is released around the end of February, after the CPI for January has been released).
Daily Brent crude spot oil prices and weekly retail gasoline prices.
The nowcasts are produced using ten data series. Eight data series are monthly. Five of these monthly series come from the BLS: the CPI, the core CPI, the CPI for food, the CPI for food at home, and the CPI for gasoline. (All of the CPI series we use are seasonally adjusted.) Three of the monthly series come from the BEA: the PCE price index, the core PCE price index, and the PCE price index for food and beverages purchased for off-premises consumption. One data series is weekly: retail gasoline prices, released each Monday by the Energy Information Administration. One data series is daily: Brent crude spot oil prices, from the Financial Times or the Energy Information Administration.
In a nutshell, there are four parts to the model. The first part nowcasts (or, perhaps more accurately, forecasts) core inflation. To do so, we find that estimates based entirely on the recent past do a fairly good job. The second part forecasts food price inflation. Again, we primarily use the recent past to forecast future food price inflation. The third part nowcasts gasoline price inflation. We use a combination of current gasoline prices and current oil prices, under the assumption that today’s oil prices are informative about where gasoline prices are likely to head in the future, and then we seasonally adjust the data. Finally, the fourth part combines the nowcasts and forecasts of core inflation, food price inflation, and gasoline price inflation to come up with nowcasts of inflation in either the CPI or PCE price index.
Nowcasts change when new data arrive that are different than what was expected. This can be either because of the frequency with which new data arrive or the volatility of that new data.
The core inflation nowcasts use very few data sources, which arrive infrequently; therefore, they only change infrequently. Nowcasts of core CPI inflation are based only on past core CPI inflation; thus, the nowcasts can only change when new CPI data are released (or when past data are revised). However, if the data come in exactly as expected, then the core CPI inflation nowcasts will not actually change. Nowcasts of core PCE inflation are primarily based on past core PCE inflation, but they can also be affected by the availability of CPI data: if we have one more core CPI observation than core PCE for some month t, then we map month t’s core CPI observation to core PCE in month t. Thus, core PCE nowcasts can only change when we get new data on either the CPI or the PCE price index—but again, if the data come in exactly as expected, they actually will not change.
Core inflation also tends to be relatively stable, so revisions to core inflation nowcasts can be small when they do occur. By contrast, gasoline prices play an important role in headline CPI and PCE inflation nowcasts, and gasoline price nowcasts depend in turn on oil prices. Oil prices move around almost every day, and they can be quite volatile and thus difficult to predict. The headline inflation nowcasts can change when new CPI or PCE price index data are released; but between releases, they often move around based on incoming oil and gasoline price data.
Nowcasts are a type of forecast and thus are always subject to considerable uncertainty and imprecision. After all, we are using a very small number of series (ten) and simple statistical techniques to make informed guesses about economic indicators before they are released. By contrast, the official data releases are usually the product of tens of thousands of observations, powerful computational techniques, and a very large number of hours worked. On average, the model’s nowcasts tend to be more precise than a range of competing nowcasts, but the outperformance is not absolute. The accuracy of each individual nowcast depends on a range of factors, including the measure under consideration and the point in the month or quarter that the nowcast is being made. On average, nowcasts made with more information later in a month or quarter tend to be more accurate. But shocks are ever-present that can push inflation away from the nowcasted value, especially if they occur to inflation components that we do not try to model.
The charting tool on the nowcasting website allows you to plot a sequence of nowcasts for previous months or quarters along with the actual inflation release (for simplicity, we display the first available data release corresponding to the quarter or month being nowcasted). This allows the user to see how close or far the model’s nowcasts were compared with what was actually released by the statistical agency (the BLS or the BEA). Typically, nowcasts early in the month or quarter are less precise than nowcasts made later in the month or quarter, because the early nowcasts are based on less information than later nowcasts.
We are constantly seeking ways to improve this website and its functionality. One item on the to-do list is to provide an option that includes historical nowcasting error bands in the charts that vary with the exact information set available at a given point in time. These bands would start out wide at the beginning of a month or quarter and then shrink over time as more information accumulates.
Yes, the basic model is the same, but there is one difference. The paper uses a single series on food inflation (specifically, the CPI for food) in constructing both CPI and PCE inflation estimates. On the website, the PCE inflation estimates are constructed using a different measure of food inflation—inflation in the PCE price index for food and beverages purchased for off-premises consumption.
This change is methodologically more consistent with how the PCE price index is constructed, and it would have been great to include it in the paper. But unfortunately, a long real-time history of this particular series is not available.
After deciding to include the PCE price index for food and beverages purchased for off-premises consumption, we added one more series to the model—the CPI for food at home. Monthly inflation in the CPI for food at home has historically been similar to monthly inflation in the PCE price index for food and beverages purchased for off-premises consumption. As a result, the CPI for food at home can provide some additional information at times about the PCE price index for food and beverages purchased for off-premises consumption.
In this document, we very quickly go through the key elements of the model used to compute the inflation nowcasts, focusing more on practical implementation than technical details. For technical detail on the model, see the working paper.
“Nowcasting US Headline and Core Inflation.” This working paper explains the background and model behind our inflation nowcasts.
User’s Guide
The Cleveland Fed’s Center for Inflation Research is the hub for “all things inflation,” providing a combination of research, analyses and data, background and commentary, and an annual conference series dedicated to inflation.
The Cleveland Fed is part of the Federal Reserve, the central bank of the United States. With offices in Cleveland, Cincinnati, and Pittsburgh, we serve an area that comprises Ohio, western Pennsylvania, eastern Kentucky, and the northern panhandle of West Virginia. The goal of our work is to strengthen the economic performance of the nation and our region. Learn more about us and what we do.
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