Core Consumer Price Index
The Core Consumer Price Index (CPI) is an economic indicator used to measure the change in the price of goods and services purchased by consumers. It is a measure of inflation and is used to assess the health of the economy. The Core CPI excludes volatile items such as food and energy, which can have a large impact on the overall CPI. The Core CPI is used to measure the underlying trend in prices and is considered to be a more reliable indicator of inflation than the overall CPI.
History of the Core CPI
The Core CPI was first developed in the United States in the late 1940s. It was initially used to measure the cost of living in the United States. Over time, the Core CPI has become an important economic indicator used to measure inflation and the health of the economy. The Core CPI is used by central banks, governments, and economists to assess the impact of economic policies and to make decisions about monetary and fiscal policy.
Comparison of Core CPI and Overall CPI
| Measure | Core CPI | Overall CPI |
|---|---|---|
| Inflation Measurement | Excludes volatile items such as food and energy | Includes volatile items such as food and energy |
| Reliability | Considered to be more reliable | Less reliable |
| Uses | Used to measure underlying trend in prices | Used to measure overall inflation |
Summary
The Core Consumer Price Index (CPI) is an economic indicator used to measure the change in the price of goods and services purchased by consumers. It is a measure of inflation and is used to assess the health of the economy. The Core CPI excludes volatile items such as food and energy, which can have a large impact on the overall CPI. The Core CPI is used to measure the underlying trend in prices and is considered to be a more reliable indicator of inflation than the overall CPI. For more information about the Core CPI, visit the websites of the Bureau of Labor Statistics, the Federal Reserve Bank of St. Louis, and the International Monetary Fund.
See Also
- Consumer Price Index (CPI)
- Producer Price Index (PPI)
- Gross Domestic Product (GDP)
- Gross National Product (GNP)
- Inflation Rate
- Interest Rate
- Unemployment Rate
- Balance of Trade
- Exchange Rate
- Money Supply
