US Core CPI

Core CPI strips food and energy out of the Consumer Price Index. Both categories swing with harvests, weather, geopolitics and oil supply, often for reasons monetary policy cannot touch, so removing them leaves a series that moves more slowly and is thought to say more about where inflation is settling. It is published in the same release as the headline index, in the same two forms: a seasonally adjusted change on the month and an unadjusted change on the year.

On release mornings the core monthly print is frequently the number that decides the market's reaction. The difference between a rounded 0.2% and 0.3% has, at times, been enough to reprice expectations for several Federal Reserve meetings. Traders also dig into the unrounded figure and the components: shelter, used cars, airfares, motor-vehicle insurance and medical care have each driven surprises at different points. A firm reading has historically tended to lift short-dated yields and the dollar and weigh on long-duration equities.

Analysts increasingly slice the core further. 'Supercore', services excluding shelter, is watched because it is closely tied to wage costs. Owners' equivalent rent, estimated from rental data, lags market rents by many months, so turning points in housing show up late.

Core PCE, the Fed's preferred underlying gauge, draws on many of the same price quotes but weights them differently, so the two measures can diverge. Economists usually translate the CPI and PPI details into a core PCE estimate within hours.