What is core inflation?
Core inflation measures price trends after excluding specified volatile or administered-price items.
Definition, calculation and mechanism
Excluded components depend on the statistical definition; food and energy are common examples. The aim is to observe persistent trends apart from short swings. Exclusion does not make those items unimportant to households.
Interpretation, examples and limits
Central banks consider headline and core measures together. Countries may define core differently. Evaluate trends, expectations and wages rather than one month in isolation.
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