The measure of inflation that excludes food and energy from the Consumer Price Index is core CPI.
The Consumer Price Index measures changes in the prices consumers pay for a representative basket of goods and services. Core CPI removes food and energy components because their prices are especially vulnerable to short-term shocks, including droughts, harvest conditions, oil-supply disruptions and geopolitical crises. The result is intended to highlight the broader trend in consumer prices.
Core CPI is widely reported because it can be easier to interpret than headline CPI during periods when gasoline or grocery prices move dramatically. It does not mean food and energy are unimportant, nor does it claim that every excluded price change is temporary. It is simply an analytical measure designed to reduce volatility.
Core CPI is often confused with core PCE. Both commonly exclude food and energy, but they are different indexes with different baskets, weights and coverage. CPI is compiled by the Bureau of Labor Statistics, while PCE is produced by the Bureau of Economic Analysis. The Federal Reserve generally emphasizes PCE inflation, even though news reports frequently spotlight CPI.