#CPIWatch The Consumer Price Index (CPI) is a crucial economic indicator that measures the average change in prices of a basket of goods and services consumed by households. Here's what's happening with CPI:

*Current Inflation Rates:*

- *Year-over-Year CPI:* 2.86% as of August 2025

- *Core CPI (excluding food and energy):* 3.02% as of August 2025

- *Month-over-Month CPI:* 0.31% as of August 2025

- *Core CPI (month-over-month):* 0.24% as of August 2025

*What's Behind the Numbers:*

- The Cleveland Fed's inflation nowcasting model uses high-frequency data like daily oil prices and weekly gasoline prices to estimate current inflation rates.

- The model also incorporates monthly CPI and PCE inflation readings to provide accurate forecasts.

- Core inflation tends to be relatively stable, while headline inflation can be more volatile due to fluctuations in food and energy prices ¹.

*Why CPI Matters:*

- CPI is a key indicator of inflation, which can impact monetary policy, interest rates, and the overall economy.

- Understanding CPI trends can help consumers, businesses, and policymakers make informed decisions about investments, pricing, and economic policy.