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Inflation and Prices

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The Consumer Price Index (CPI) increased an annualized 3.8% in May, partly because energy prices rebounded after five months of decline. The CPI trend has now risen to the lower limit of the FOMC central tendency established in February 1998. Excluding its food and energy components, the CPI increased at 2.8% (annualized rate); along with the median CPI, this suggests that the underlying inflation trend is holding just under 3%. Interestingly, the median CPI, an alternative measure of core inflation, held steady at just below 3.0% this year and last, while the CPI and the CPI excluding food and energy initially drifted below that rate and recently returned to it.


Suggested citation: “Inflation and Prices,” Federal Reserve Bank of Cleveland, Economic Trends, no. 98-07, pp. 07-08, 07.01.1998.

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