Median Consumer Price Index Cleveland Fed

Median Consumer Price Index (CPI) is a measure of core inflation calculated the Federal Reserve Bank of Cleveland and the Ohio State University. Median CPI was created as a more accurate way to depict ‘Core CPI’, or a better measure of actual underlying inflation trends. To calculate the Median CPI, the Cleveland Fed analyzes the median price change of the goods and services published by the BLS. The median price change is the price change that’s right in the middle of the long list of all of the price changes. The series excludes 49.5% of the CPI components with the highest and lowest one-month price changes from each tail of the price-change distribution resulting in a Median CPI Inflation Estimate. According to research from the Cleveland Fed, the Median CPI provides a better signal of the inflation trend than either the all-items CPI or the CPI excluding food and energy and according to more recent research of the Cleveland Fed, the Median CPI is better at depicting PCE inflation in the near and longer term than the core PCE.