State Street PriceStats Inflation Index: Overview and Relevance to S&P 500 Outlook
The State Street PriceStats Inflation Index, developed in partnership with PriceStats, is a set of indices that measure real-time inflation trends across various countries and sectors using online price data. Unlike traditional inflation metrics like the Consumer Price Index (CPI), which rely on periodic surveys, the PriceStats indices collect daily online price data for a broad basket of goods, offering more timely insights into inflation trends. This is particularly relevant to the S&P 500 outlook provided by JPMorgan, as stable macroeconomic data, including inflation, is one of the key drivers behind their bullish prediction of a 300-point upside for the index. Below is a detailed overview of the State Street PriceStats Inflation Index and its implications.
Key Features of the State Street PriceStats Inflation Index
1. Real-Time Data Collection:
• PriceStats collects online prices daily from a wide range of products across 70 countries, standardizing inflation measurements to allow for cross-country comparisons.
• The indices cover 25 economies, with specific series for countries like the U.S., U.K., Brazil, Germany, France, and others, as well as sector-specific views (e.g., food and fuel).
• The methodology, developed by MIT academics Roberto Rigobon and Alberto Cavallo, uses web-scraped data to track price changes, often leading official statistics by two to three months.
2. Global and Sectoral Coverage:
• The PriceStats Daily World Food Inflation Index is a composite index covering 23 countries, including the U.S., U.K., Japan, and emerging markets like Brazil and China. It uses the non-seasonally adjusted food and non-alcoholic beverages component of the CPI, weighted by 2010 household consumption expenditure data from the World Bank.
• Sector-specific series, such as U.S. sector indices and China’s fresh food and supermarket indices, provide granular insights into inflation drivers.
3. Applications for Investors:
• The indices help investors understand inflation trends, currency movements, and potential interest rate changes, which are critical for equity and fixed-income markets.
• For example, State Street notes that the indices can signal currency appreciation or depreciation based on relative inflation rates between countries.
• The indices are distributed through State Street Global Markets, targeting institutional investors for applications in portfolio management and risk assessment.
4. Recent Insights:
• A post from State Street on X (May 27, 2025) indicates that U.S. price levels in mid-May 2025 remain “surprisingly normal,” but prices of imported goods from China have risen over 2% since March 2025. This suggests localized inflationary pressures that could influence market dynamics.
