PPI and CPI Seasonal Adjustment during the COVID-19 Pandemic

https://www.bls.gov/opub/mlr/2022/article/ppi-and-cpi-seasonal-adjustment-during-the-covid-19-pandemic.htm

13 Pages Posted: 28 Jun 2022

See all articles by Blake Hoarty

Blake Hoarty

U.S. Bureau of Labor Statistics

Steven Muri

Bureau of Labor Statistics

Daniel Pallotta

Bureau of Labor Statistics

Marie Rogers

Bureau of Labor Statistics

Jonathan Weinhagen

Bureau of Labor Statistics

Jeffrey Wilson

Bureau of Labor Statistics

Date Written: May 2, 2022

Abstract

The U.S. Bureau of Labor Statistics publishes seasonally adjusted Consumer Price Index (CPI) and Producer Price Index (PPI) data monthly. Seasonal adjustment removes within-year seasonal patterns from data. To seasonally adjust data and estimate seasonal patterns of time series, the CPI and PPI use a filter-based approach that employs moving averages of historical data. In 2020, many PPIs and CPIs experienced extreme movements because of the coronavirus disease 2019 (COVID-19) pandemic. For example, the PPI and CPI for gasoline decreased 53.0 percent and 16.5 percent in April 2020, respectively. Because the CPI and PPI use historical data to estimate seasonal patterns, the extreme price movements in 2020 could have adversely affected the capability of the two price programs to accurately estimate seasonally adjusted data. This article explains how the CPI and PPI mitigated the effects of the COVID-19 pandemic on their seasonally adjusted price indexes. Mitigation steps included identifying price indexes whose movements were affected by the pandemic, estimating time series models to quantify these effects, and removing pandemic-related price movements from the data before estimating seasonal patterns.

Suggested Citation

Hoarty, Blake and Muri, Steven and Pallotta, Daniel and Rogers, Marie and Weinhagen, Jonathan and Wilson, Jeffrey, PPI and CPI Seasonal Adjustment during the COVID-19 Pandemic (May 2, 2022). https://www.bls.gov/opub/mlr/2022/article/ppi-and-cpi-seasonal-adjustment-during-the-covid-19-pandemic.htm, Available at SSRN: https://ssrn.com/abstract=4146861 or http://dx.doi.org/10.2139/ssrn.4146861

Blake Hoarty (Contact Author)

U.S. Bureau of Labor Statistics ( email )

2 Massachusetts Ave NE
Washington, DC 20212
United States
9194145917 (Phone)

Steven Muri

Bureau of Labor Statistics

Daniel Pallotta

Bureau of Labor Statistics

Marie Rogers

Bureau of Labor Statistics

Jonathan Weinhagen

Bureau of Labor Statistics

Jeffrey Wilson

Bureau of Labor Statistics

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