The financial encyclopedia uses cookies to improve your user experience. Find out more here!




Core inflation


A measure of inflation of consumer prices excluding the prices of certain items. The items excluded may include food, whose prices are subject to seasonal fluctuations, fuel, whose prices are subject to large variations, for example because of actions by the Organization of Petroleum Exporting Countries, and other seasonal items or items whose prices may be subject to temporary shocks. The use of a measure of core inflation may assist in the production of better forecasts of long-run inflation. Since 2000, core inflation is the preferred measure of inflation in the US by the Federal Reserve Board; most other countries use the measure of inflation as determined by the consumer price index.


Reference: Oxford Press Dictonary of Economics, 5th edt.