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US core inflation rises to 40-year highs: What does it mean?

Everybody knows that inflation is growing worldwide. However, what does it mean if the core inflation rate rises too much?

While everyone is watching how inflation is doing, more types of inflation determine how the economy is actually performing. Before diving into more details, let’s first break down what it is.

Core inflation explained

Core inflation measures change in prices for goods and services, but exclude prices for those in the food and energy industries. These items are not included in the general inflation metric because of how much more volatile their prices are. 

Related article: Inflation – what it is and why should everyone pay attention

Most of the time, it is calculated through the consumer price index (CPI), which measures the price of goods and services. The combination of the core personal consumption expenditures (PCE) index and the CPI measures core inflation. The PCE serves as a gauge of consumer spending on goods and services in the US. 

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I got into financial markets by accident in 2012 and started with Forex trading. Later in 2017, I started investing in stocks in cryptocurrencies and began writing articles profess...


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