Core CPI: Measure Monthly Inflation

The Core CPI (Core CPI) m/m shows changes in average prices for the consumer basket of goods and services in a given month compared to the previous month. The index shows how prices change from the consumer’s point of view. In other words, it allows to estimate changes in the cost of living. Food and energy are excluded from the calculation of the underlying index due to their extreme volatility.

The goods and services included in the CPI calculation basket are divided into main groups, such as housing, clothing, transportation, medical care, entertainment, education, communications and other goods and services. These collections, in turn, are divided into more than 200 categories with about 80,000 titles. The index calculation does not include income taxes and investment items (stocks, bonds, insurance policies). Unlike the PPI, the prices of imported goods and the prices of indirect production are included in the calculation..

Prices of goods and services, on which the index is calculated, are collected through a monthly survey of about 23,000 commercial and service companies. The sample is reviewed from time to time. Thousands of families across the country were also interviewed. The weights of calculation items are regularly reviewed. The index is calculated in comparison with standard prices as of 1982.

CPI calculation takes into account the spending of urban populations, such as specialists, self-employed citizens, the unemployed, officials and retirees. Farmers, rural residents, military personnel and individuals in prisons and psychiatric hospitals are not included in the calculation.

core consumer price index is often used to assess inflation. CPI growth points to an increase in inflation.

index is used to adjust wages and social payments. The consumer price index is also used to adjust the income tax structure and in calculating real GDP. CPI growth is positive for dollar prices..

US inflation data in line with expectations and falls to 3.4%

The US Bureau of Labor Statistics (BLS) reported that inflation in the US, as measured by the change in the consumer price index (CPI), fell to 3.4% year-on-year in April from 3.5% in March. This reading was in line with market expectations.

The annual core consumer price index, which excludes volatile food and energy prices, fell to 3.6 percent from 3.8 percent in the same period, in line with analysts’ estimates. On a monthly basis, the CPI and core CPI rose 0.3%.

The Bureau of Labor Statistics said in its press release: “The shelter index rose in April, as did the gasoline index. These two indicators combined contributed more than 70% of the monthly increase in the index for all items.” “The energy index rose 1.1%. The food index was unchanged in April. The home food index fell by 0.2%, while the food away from home index increased by 0.3% during the month.”

Market Reaction to US Inflation Data

The US dollar came under renewed selling pressure with the immediate reaction. At the time of writing, the US dollar index was down 0.5% intraday at 104.50.

The Fed will not give confidence to cut interest rates but will weaken talk of further rate hikes and problematic inflation. Combine it with today’s weak retail sales data, and there will be a sophisticated picture of a weak economy.

One area that has remained high is rents and equivalent rent for landlords. That may give the Fed some relief because the market-based numbers have fallen, so it’s a matter of timing. So they will be relieved that there is some contraction in the component that makes up one-third of the CPI. In addition, increases in energy prices in April eased in May.

Annual changes in the US Consumer Price Index for May

In May, the Consumer Price Index (CPI-U) for all urban consumers was not recorded and changes based on the seasonal rate. Compared to the same period a year earlier, it increased by 3.3 percent before seasonal improvements.

In terms of representative details of the index, the May allowance index rose 0.4 percent for the fourth consecutive month. The food index increased by 0.1 percent, with the food from home index rising by 0.4 percent while the food at home index remained unchanged food from home. Energy fell 2.0 percent during the month, adjusted by 3.6 percent in the gasoline index.

When food arrived, the index of all other Mercedes cars rose 0.2 percent in May, after rising 0.3 percent the previous month. Among the items that emerged in May include shelter, medical care, used cars and trucks. While the prices of airline tickets, new and tourist vehicles are determined.

Over the 12 months, Liverpool’s index rose 3.3 per cent ahead of the season advance, up less than the 3.4 per cent increase in the 12 months ending in April. All investigators realized that the food index reached 3.4 percent over the 12 months. The energy index increased 3.7 percent over the 12 months to May. The food index has reached 2.1 percent over the past year.

The food index rose 0.1 percent after remaining unchanged in April. The index of home food was unchanged in May. During the month, two of the six main food group indices for grocery stores declined, two remained unchanged, while the remaining indices saw prices rise..

The index of dairy and related products fell 0.5 percent in May, led by a 1.3 percent drop in the milk index. The non-alcoholic beverages index fell 0.3 percent during the month.

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