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The core inflation rate is the percentage change in a price index that leaves out food and energy, the two categories whose prices tend to move most. There is no single official core rate, though. In the United States, the number most often meant is core PCE, published by the Bureau of Economic Analysis (BEA). On its core PCE data page, which showed the current release as of October 8, 2026, core PCE rose 3.0% over the 12 months through August 2026.
Which core rate you are looking at
A core inflation figure is incomplete until you know which index produced it and which months it covers. Two official U.S. series are commonly labeled “core,” and the Federal Reserve has also cited a core reading in its own report. Each one is a separate calculation with its own date.
| Measure | Publisher | Latest figure in the sources cited here | Period covered |
|---|---|---|---|
| Core PCE (PCE Price Index Excluding Food and Energy) | Bureau of Economic Analysis | 3.0% year over year | 12 months through August 2026, shown on the BEA data page as of October 8, 2026 |
| Core inflation (as reported in the Fed’s Monetary Policy Report) | Board of Governors of the Federal Reserve System | 3.4%, compared with 2.8% a year earlier | 12 months ending May 2026, from the July 2026 report; the report does not restate the index in the passage cited here |
| Core CPI (CPI-U All Items Less Food and Energy) | Bureau of Labor Statistics | Not stated in the BLS material cited here | Not stated in the BLS material cited here |
These figures do not contradict each other. The BEA number is a later observation than the Fed’s May 2026 reading, and the two publications describe different periods. If you quote one, state the publisher, the index, and the months it covers. The BEA page also lists September 30, 2026 as the current release and October 29, 2026 as the next one, so the August figure will be replaced on that schedule.
What “core” removes from the index
BEA describes its core measure this way: the core PCE price index “makes it easier to see the underlying inflation trend by excluding two categories – food and energy – where prices tend to swing up and down more dramatically and more often than other prices.” The exclusion is a statistical choice made to isolate a trend. It does not treat food and energy as unimportant.
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BEA’s definitions are narrower than many readers expect, so it helps to know exactly what is removed.
Food in core PCE
- Excluded: “food and beverages purchased for off-premises consumption,” such as groceries.
- Not excluded: “food services and accommodations,” such as restaurant meals and hotel stays. BEA notes that prices in these categories tend to be less volatile than food commodities, so they stay in the core index.
Energy in core PCE
- Gasoline and other energy goods.
- Electricity and gas utilities.
Removing these categories means a core reading can be calm while a household’s grocery or fuel bills are rising quickly. The two numbers measure different things.
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Core PCE and core CPI are not interchangeable
The two most-cited U.S. measures come from different agencies and different indexes. BLS publishes the Consumer Price Index for All Urban Consumers (CPI-U). BLS presents the headline All Items index, which represents all consumer goods and services including food and energy, and it also publishes an All Items Less Food and Energy series, which is commonly called core CPI. BEA’s PCE measure is built differently. BEA’s comparison guide says PCE captures changing consumer behavior and a wider range of expenses, and that it differs from CPI in formulas and uses.
| Feature | Core PCE (BEA) | Core CPI (BLS) |
|---|---|---|
| Full name | PCE Price Index Excluding Food and Energy | CPI-U All Items Less Food and Energy |
| Food excluded | Food and beverages purchased for off-premises consumption; food services and accommodations stay in | Food excluded; the BLS material cited here does not list the exact category boundaries |
| Energy excluded | Gasoline and other energy goods; electricity and gas utilities | Energy excluded; detailed component list not stated in the BLS material cited here |
| Population and spending captured | Captures changing consumer behavior and a wide range of expenses (BEA comparison guide) | Population and basket covered by the CPI-U series (BLS CPI FAQ) |
| Revisions | BEA revises previously published PCE data when new information or methods become available | Not stated in the BLS material cited here |
| Federal Reserve reference | The FOMC’s longer-run 2 percent objective is expressed in terms of PCE inflation | Monitored by the Fed as one of several indexes |
Because the formulas and coverage differ, a core CPI figure and a core PCE figure for the same month will often not match. Neither is a “more correct” version of the other; they answer slightly different questions.
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The Federal Reserve’s own FAQ explains the reasoning: “Although food and energy make up an important part of the budget for most households—and policymakers ultimately seek to stabilize overall consumer prices—core inflation measures that leave out items with volatile prices can be useful in assessing inflation trends.” A large move in food or energy prices does not necessarily continue, so policymakers use core measures to judge whether a price change is likely to persist.
The Fed’s longer-run objective is framed around headline-style PCE inflation, not core. The FOMC has affirmed that an annual increase of 2 percent in the PCE price index is most consistent over the longer run with its mandate for maximum employment and price stability. That is a target, not a description of current conditions. The July 2026 Monetary Policy Report says core price inflation has historically been a better gauge of future inflation. That is a statement about its usefulness as an indicator, not a guarantee that it will predict each future movement.
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What a core rate cannot tell you
- How much a household’s grocery, fuel, or utility bills have risen, since those categories are removed from the core index.
- Whether a single month’s change will continue. Core measures are designed to show the underlying trend, not to forecast the next release.
- The inflation rate for any particular basket of goods. Both core PCE and core CPI describe broad national averages.
How to read a core inflation number correctly
- Confirm the index. Look for “core PCE,” “PCE Price Index Excluding Food and Energy,” “core CPI,” or “CPI-U All Items Less Food and Energy.” If the article says only “core inflation,” treat the figure as incomplete.
- Confirm the period. Check whether the figure is a 12-month (year over year) change or a one-month change, and which reference month it ends in. The BEA’s latest core PCE figure is for 12 months through August 2026; the Fed’s 3.4% reading covers the 12 months ending May 2026.
- Check the release vintage. BEA revises earlier PCE data, so a number quoted from an older release may differ from the current one.
- Compare like with like. Set core PCE against core PCE and core CPI against core CPI. Do not compare a PCE figure with a CPI figure as if they were the same series.
- Pair core with headline. Headline CPI includes food and energy. Reading both shows whether the costs excluded from core are moving faster or slower than the underlying trend.
When a news article reports “inflation” without qualification, look up which index it used. The official BEA and BLS releases state the series name, reference period, and release schedule on the same page as the figure.
Official sources used for this article: BEA core PCE data page and core PCE FAQ; BEA guide to price indexes; BLS CPI FAQ and misconceptions explainer; the Federal Reserve’s inflation FAQ; and the Federal Reserve’s July 2026 Monetary Policy Report.
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