Core CPI

RECENT NEWS
The Economic Times  Dec 14  Comment 
The core CPI, which excludes food and fuel, increased 0.1 per % in November from last month.
Channel News Asia  Dec 13  Comment 
U.S. consumer prices accelerated in November amid a rebound in gasoline prices, but declining healthcare and apparel costs curbed underlying inflation pressures.
The Economic Times  Dec 7  Comment 
MPC has broadly got its forecasts on inflation right ever since the June review; core CPI likely to average around 4.5 per cent in FY19
MarketWatch  Nov 15  Comment 
U.S. consumer prices, excluding food and energy rose 1.8% over the past year, the fastest pace since April, the Labor Department said Wednesday.
Reuters  May 23  Comment 
Singapore's core inflation accelerated a stronger-than-expected 1.7 percent in April from a year earlier, the fastest pace since October 2014, data showed on Tuesday.




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Core Consumer Price Index (CPI) is equal to CPI minus energy and food prices and is used to measure core inflation. The reason behind excluding energy and food prices is because the prices of these goods can be very volatile. As a result, such wide fluctuations would unfairly distort the measure of inflation.[1]

Why is it important?

The Federal Reserves uses Core CPI to decide whether they should change Fed Funds rate or not. By excluding volatile energy and food prices, the Fed can get have a better idea if the rising prices of goods and services are caused by core inflation or by the volatile energy and food prices.[2]


References

  1. Business Dictionary: Core CPI
  2. About.com: US Economy
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