When it comes to inflation, understanding it can be complex as there are multiple definitions. And under one newer measure from the Federal Reserve Bank of New York, it may be that things are getting better faster for consumers than it has seemed.
Headline inflation is the overall number that is reported. Then there is core inflation, which excludes food and energy, because they can be volatile and throw off a longer-term trend. The Consumer Price Index has a core version, but so does personal consumption expenses, or PCE.
PCE in general is an important figure for economists because it looks at how inflation hits consumers through the goods and services they purchase. Core PCE gets the consumer focus and eliminates the short-term jitters from food and energy markets.
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