Core Inflation

A A A

DEFINITION

A measure of inflation that excludes certain items that face volatile price movements. Core inflation eliminates products that can have temporary price shocks because these shocks can diverge from the overall trend of inflation and give a false measure of inflation.



INVESTOPEDIA EXPLAINS

Core inflation is most often calculated by taking the Consumer Price Index (CPI) and excluding certain items from the index, usually energy and food products. Other methods of calculation include the outliers method, which removes the products that have had the largest price changes. Core inflation is thought to be an indicator of underlying long-term inflation.


RELATED TERMS
  1. Biflation

    The simultaneous existence of inflation and deflation in an economy. Biflation, ...
  2. Headline Inflation

    The raw inflation figure as reported through the Consumer Price Index (CPI) ...
  3. Consumer Price Index - CPI

    A measure that examines the weighted average of prices of a basket of consumer ...
  4. Indicator

    Statistics used to measure current conditions as well as to forecast financial ...
  5. Inflation

    The rate at which the general level of prices for goods and services is rising, ...
  6. Deflation

    A general decline in prices, often caused by a reduction in the supply of money ...
  7. LIBOR

    LIBOR or ICE LIBOR (previously BBA LIBOR) is a benchmark rate that some of the ...
  8. Global Recession

    An extended period of economic decline around the world. The International Monetary ...
  9. Economic Exposure

    A type of foreign exchange exposure caused by the effect of unexpected currency ...
  10. Heckscher-Ohlin Model

    An economic theory that states that countries export what they can most easily ...
Related Articles
  1. The Consumer Price Index: A Friend To ...
    Options & Futures

    The Consumer Price Index: A Friend To ...

  2. Explaining The World Through Macroeconomic ...
    Options & Futures

    Explaining The World Through Macroeconomic ...

  3. What is inflation and how should it ...
    Investing

    What is inflation and how should it ...

  4. Economic Indicators To Know
    Retirement

    Economic Indicators To Know

  5. How the Cost of Living Affects Your ...
    Personal Finance

    How the Cost of Living Affects Your ...

  6. How Inflation Affects Your Cost of Living ...
    Personal Finance

    How Inflation Affects Your Cost of Living ...

  7. The Taylor Rule: An Economic Model For ...
    Economics

    The Taylor Rule: An Economic Model For ...

  8. Is it Time to Prepare for Inflation?
    Investing

    Is it Time to Prepare for Inflation?

  9. More Volatility Ahead?
    Economics

    More Volatility Ahead?

  10. 5 Reasons Why Low Rates May be Harmful ...
    Economics

    5 Reasons Why Low Rates May be Harmful ...

comments powered by Disqus
Hot Definitions
  1. Cash and Carry Transaction

    A type of transaction in the futures market in which the cash or spot price of a commodity is below the futures contract price. Cash and carry transactions are considered arbitrage transactions.
  2. Amplitude

    The difference in price from the midpoint of a trough to the midpoint of a peak of a security. Amplitude is positive when calculating a bullish retracement (when calculating from trough to peak) and negative when calculating a bearish retracement (when calculating from peak to trough).
  3. Ascending Triangle

    A bullish chart pattern used in technical analysis that is easily recognizable by the distinct shape created by two trendlines. In an ascending triangle, one trendline is drawn horizontally at a level that has historically prevented the price from heading higher, while the second trendline connects a series of increasing troughs.
  4. National Best Bid and Offer - NBBO

    A term applying to the SEC requirement that brokers must guarantee customers the best available ask price when they buy securities and the best available bid price when they sell securities.
  5. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin account. In the context of the NYSE and FINRA, after an investor has bought securities on margin, the minimum required level of margin is 25% of the total market value of the securities in the margin account.
  6. Leased Bank Guarantee

    A bank guarantee that is leased to a third party for a specific fee. The issuing bank will conduct due diligence on the creditworthiness of the customer looking to secure a bank guarantee, then lease a guarantee to that customer for a set amount of money and over a set period of time, typically less than two years.
Trading Center