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The difference between CPI and PCE seemed relatively insignificant. However, a big issue is the difference between CPI and Core CPI. CPI is the consumer price index. A measure of the cost of living for the typical person. Core CPI is the CPI â energy and food prices.
Consumer Price Index (CPI) An economic indicator that measures the rate of inflation by tracking the cost of a fixed market basket of goods and services for urban consumers. The consumer price Index is reported as a total number and as the core CPI, which excludes the highly Volatile food and energy prices. CPI is used as the basis for benefit adjustments in government entitlement programs, such as social security, and for cost of living allowances (COLAS) for private-sector organizations.