Additionally, state and local income and sales tax and gaming and energy-related revenues remain depressed, and the most recent payrolls report indicates that state and local governments are having difficulty sustaining employment levels as the virus persists. Inflation remains very low; core PCE inflation ran at 1.4 percent over the 12 months ending in November.
Even though some of the survey-based measures of inflation expectations have picked up recently, they still remain close to the lower end of their historical ranges. Market-based measures of inflation compensation have also picked up.