Computers and software add 25 bps to core PCE inflation, Ernie Tedeschi notes

Computers and software add 25 bps to core PCE inflation, Ernie Tedeschi notes
Computers and software boost core PCE inflation

Ernie Tedeschi highlights increasing rate sensitivity in the current economic environment. He notes that computers and software are contributing 25 basis points to core PCE inflation, describing this as an annoyance for the Federal Reserve but not the main reason for the current 1 percentage point gap in core PCE inflation.

Tedeschi previously reported that a univariate ARIMA forecast of core goods PCE closely matched results from NYFedResearch, with some differences highlighted in his analysis (link). In another note, he cited the U.S. adding 29,000 jobs in September 2026, alongside a rise in unemployment to 4.18 percent and continued data revisions (link). These observations form part of his ongoing commentary on trends in inflation and the labor market.

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