What this release is
Core Consumer Price Index (CPI) non-seasonally adjusted month-over-month measures the average change in prices paid by urban consumers for a basket of consumer goods and services, excluding the volatile food and energy components. This specific reading reflects the price change from the previous month without seasonal adjustments. The Bureau of Labor Statistics, an agency of the United States government, publishes this data.
Forex traders closely monitor Core CPI as a key indicator of inflation within the United States economy. Inflation trends significantly influence the Federal Reserve’s monetary policy decisions, particularly regarding interest rates. Higher or lower than expected inflation readings can lead to market participants adjusting their expectations for future interest rate changes, which in turn can affect the valuation of the US Dollar against other currencies.
After past releases, market attention often centers on the headline month-over-month percentage change. Revisions to previous months’ data, when present, can also influence market reactions. This monthly release is typically absorbed by traders as part of a broader economic picture, contributing to the overall assessment of the US economic outlook and its implications for the US Dollar.