What are nowcasts & how do they work?

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.

How did the NowCast estimate change over time?

Over time, the nowcast estimate moved up gradually, reaching 10.0 percent by July 12, a day before the release of the CPI data for the last month of the quarter, completing the Q2 CPI data.

When is the CPI nowcasted?

Case 1 occurs right before the start of the month; Case 2, day 15 of the target month; Case 3, the last day of the target month; and Case 4, day 15 of the following month, at which point the CPI for the month being nowcasted is assumed to be available, and only PCE and core PCE inflation rates remain to be nowcasted.