Core Inflation Rate MoM

Core Inflation Rate MoM is the % change in All items less food and energy in the Consumer Price Index for All Urban Consumers (CPI-U). CPI-U covers urban spending patterns of over 90% of the United States population; national publication began in 1921 with data back to 1913. Each month about 100,000 prices and about 8,000 rental quotes are collected in 75 urban areas from 6,000 housing units and approximately 22,000 retail outlets. It excludes rural spending, house purchase prices proxied by owners' equivalent rent (OER), meaning rental value, plus producer receipts and cross-city price levels.

Prices are collected through the entire reference month in 3 pricing periods, so data correspond to a month rather than a specific date. It is released once a month around the 10th to 14th after the reference month, under embargo until 8:30 AM Eastern Time. Each release also shows headline CPI, food and energy detail, the core section, Table A, CPI-W, preliminary C-CPI-U, weights, index levels, and a Technical Note.

CPI-U is final on release while C-CPI-U stays preliminary with quarterly revisions, and seasonal factors revise 5 years each February. Readers use adjusted monthly change to analyze month-to-month moves and 12-month change as reference.

Core covers the full basket minus food and energy, with shelter usually the largest contributor to the monthly move.

• Shelter: rent of primary residence, owners' equivalent rent, and lodging away from home; usually the largest contributor.
• Medical care: commodities including prescription drugs plus physicians', dental, hospital, and nursing-home services, mostly Laspeyres-estimated.
• New and used vehicles: core goods with frequent substitution and quality adjustment.
• Transportation services: airline fares, motor vehicle insurance, and other services excluding motor fuel, often volatile month to month.
• Apparel and household furnishings: clothing and footwear with partly seasonal collection plus durables and household goods inside core.
• Recreation, education and communication, and other goods and services: tuition, telephone services, tobacco, personal care, and personal services.

July 2022 data was released August 10, 2022. Headline CPI was unchanged at 0.0% on a seasonally adjusted basis after a 1.3% June rise, while core rose 0.3% monthly and 5.9% annually.

Gasoline fell 7.7% and energy fell 4.6% over the month, offsetting food gains of 1.1% and shelter gains. Inside core, shelter rose 0.5%, and medical care, motor vehicle insurance, furnishings, new vehicles, and recreation rose. Airline fares, used cars, communication, and apparel (-0.1%) fell. The flat headline masked 0.3% persistent monthly inflation, showing why core filters volatile food and energy moves.

1. Basic relatives: most of the 7,776 item-area cells use the weighted geometric mean of monthly price relatives. Listed shelter, utility, fee, and medical-care strata use modified Laspeyres, meaning weights act as base-period quantities.
2. Shelter estimator: rent and owners' equivalent rent use a 6-month chained estimator. The 6-month weighted rent change gives the 1-month relative through its 6th root, with vacancy imputation and aging adjustment.
3. Quality adjustment: substitutions use direct comparison, direct adjustment including hedonic models, or imputation.
4. Aggregation: basic indexes are averaged with Consumer Expenditure Survey weights, updated every January.
5. Seasonal adjustment: the monthly core reading is seasonally adjusted with X-13ARIMA-SEATS, with factors updated each February.
6. % change: change equals current index minus prior index divided by prior index times 100. BLS shows 112.500 to 121.500 as 8.0%. Monthly standard error is 0.04%, so a 0.2% move sits between 0.12% and 0.28% at 95% confidence.
7. Illustrative example: for illustration, 320.000 to 320.960 gives 0.3%. The index base is 1982-84 equals 100, so 107.000 means a $100 base-period basket costs $107.