Core Inflation
Definition
A measure intended to reveal the underlying trend in inflation by reducing the influence of temporary or unusually large price movements. Methods differ; not all measures simply exclude food and energy.
Canada
Why does the Bank of Canada watch core inflation?
Core measures help separate persistent price pressure from unusually large price swings. CPI-trim removes items at the extremes of the monthly price-change distribution, while CPI-median identifies the price change at its weighted midpoint. A gasoline price spike can lift headline CPI even as these core measures show less movement.
Statistics Canada CPI guideUnited States
How does U.S. core inflation differ from headline inflation?
U.S. core CPI and core PCE commonly exclude food and energy from their respective headline measures. A jump in gasoline prices can lift the headline readings while having little immediate effect on the core readings.
U.S. Bureau of Economic Analysis PCE price index