Sectoral inflation and the Phillips curve: What has changed since the Great Recession?

Using sectoral data at a medium level of aggregation, we find that disaggregated inflation rates became less responsive to aggregate unemployment around 2009-2010. The slopes of the disaggregated Phillips curves diminished in many sectors, including housing and some services. We also document a decrease in sectoral inflation persistence, suggesting an increase in the weight of the forward-looking inflation expectation component and a decrease in the weight of the backward-looking component.