Core CPI refers to the change in the costs of goods and services, excluding those from the food and energy sectors, which are considered more volatile. Core inflation represents the long-run trend in the price level, and it is measured by both the consumer price index (CPI) and the core personal consumption expenditures (PCE) index. The CPI is constructed each month using a fixed basket of goods and services representing what Americans buy in their everyday lives, and it is designed to measure price changes faced by urban consumers. The Federal Reserve uses core inflation as an indicator of underlying long-term inflation, and it is important because it helps to determine the impact of rising prices on consumer income.