How to read a CPI report: headline vs core, monthly vs annual, and why markets react

A CPI report tells you how much the prices consumers pay have changed. To read one, look at four numbers: the headline monthly change, the headline 12-month change, and the same two for core inflation, which leaves out the most volatile items. In the US the monthly figures are seasonally adjusted and the 12-month figures are not, which is why the two can seem to tell different stories.

This guide uses the US consumer price index, published by the Bureau of Labor Statistics (BLS), as the main example, then covers the UK and euro area measures. It explains how the report is built and why markets watch it. It does not forecast inflation or say how to trade the release.

What the CPI measures

The CPI measures the average change over time in the prices paid by consumers for a representative basket of goods and services. The BLS sorts spending into more than 200 categories, grouped into eight major groups: food and beverages, housing, apparel, transportation, medical care, recreation, education and communication, and other goods and services. Sales and excise taxes tied to a purchase are included; income tax is not, and neither are investments such as stocks, bonds or property.

The figure the press quotes is the CPI for All Urban Consumers (CPI-U), which covers over 90% of the US population. A narrower index, the CPI-W, follows households of wage earners and clerical workers, about 30% of the population. Prices are collected each month in 75 urban areas, and each item’s price change is weighted by its share of consumer spending, based on surveys of what households actually buy.

The weights explain a lot of what you will read. In the weights used for the September 2026 report, shelter (rent and the estimated rental value of owned homes) made up roughly a third of the whole index, while food and energy together came to about a fifth. A small move in shelter can therefore matter more than a large move in a minor category.

Headline vs core

Headline CPI is the all items index: everything in the basket.

Core CPI is the BLS series “all items less food and energy”. The BLS notes that some users prefer it because food and energy prices are relatively volatile, and they want to see what they regard as the underlying rate of inflation. Core is not a separate survey; it is the same basket with two groups removed.

The two can diverge sharply. In the September 2026 report the all items index rose 0.6% on the month, and the BLS said gasoline, up 9.1%, accounted for over half of that increase. Core rose 0.3%. Over 12 months, headline was 3.7% and core was 2.6%, with the energy index up 20.4%. A reader who saw only the headline would have missed that most of the jump came from fuel.

Neither number is the “right” one. Headline is what households pay. Core is a guide to whether price rises are spreading beyond the items most exposed to commodity swings.

Monthly vs 12-month changes

Every CPI report gives two kinds of change.

• Month-over-month: the change from the previous month. In the US release the headline monthly figure is seasonally adjusted.
• Year-over-year (12-month): the change from the same month a year earlier. The BLS reports it before seasonal adjustment.

Seasonal adjustment removes price movements that recur at about the same time and size every year, such as those from weather, production cycles, model changeovers, holidays and sales. The BLS says seasonally adjusted changes are usually preferred for short-term trends. Its seasonal factors are updated each February, and the previous 5 years of seasonally adjusted data are revised at that point, so an adjusted monthly figure you remember may later read slightly differently. The unadjusted CPI-U and CPI-W, by contrast, are final when issued.

The 12-month rate is the one compared with central bank targets, but it moves slowly: each month one old monthly change drops out and one new one comes in. That is why a rise in the 12-month rate can partly reflect what happened a year ago (a “base effect”) rather than what happened this month.

Example, with hypothetical numbers: suppose the index stood at 292.1 twelve months ago, at 300.0 last month and at 300.9 this month. The monthly change is 0.9 ÷ 300.0, or 0.3%. The 12-month change is 300.9 ÷ 292.1 minus 1, or about 3.0%. If 0.3% were repeated for a full year, compounding would give about 3.7% (1.003 to the power of 12), which is why a run of monthly prints can signal a direction before the 12-month rate gets there. Note that the index moved 0.9 points but the percentage depends on the starting level, which is why the BLS recommends percent changes over index-point changes.

How to read the release, line by line

The BLS release follows the same shape each month. A practical order of reading:

1. The first paragraph. The headline monthly change (seasonally adjusted) and the 12-month change (unadjusted).
2. What drove it. The release names the components that contributed most. Energy, shelter and food are usually discussed first.
3. Core. The monthly and 12-month change for all items less food and energy, and which components rose or fell.
4. Table A. Seasonally adjusted monthly changes for the last seven months for all items, food, energy, core and selected categories such as shelter and gasoline, plus the unadjusted 12-month change. This shows whether a month is out of line with recent ones.
5. The technical note. Explains sampling error. For example, the BLS estimates the standard error of the monthly all items change at 0.04 percentage points, so small differences between one month and another, or between a print and expectations, can be within the noise.

The release is published at 8:30 a.m. Eastern Time, and the date of the next one is printed at the end of each release. Our market hours tool shows what that time is where you are and which sessions are open.

Why traders watch it

Traders watch the CPI because inflation shapes what central banks do with interest rates. In September 2026 the FOMC raised its target range while saying in its statement that inflation remained elevated. Analysts compare each print with the forecasts published beforehand, but this guide doesn’t predict how prices respond to any given release.

One detail often missed: the Federal Reserve’s 2% goal is not defined by the CPI. The Federal Open Market Committee says inflation of 2% over the longer run, as measured by the annual change in the price index for personal consumption expenditures (PCE), is most consistent with its mandate. The CPI comes out earlier in the month and is widely watched as a read on the same price pressures, but the two indexes differ in coverage and weighting and do not move one for one. For how rate decisions are announced, see our coverage of the September 2026 FOMC statement.

Check your broker’s terms for how it treats scheduled data releases. Our guide to margin calls explains what happens if a sudden move eats into a leveraged account, and our guide to FX trading sessions covers when liquidity is normally deepest.

The UK and euro area versions

United Kingdom. The Office for National Statistics publishes two main measures. CPI is the measure the Bank of England targets, at 2%. If CPI inflation is more than 3% or less than 1%, the Governor must write to the Chancellor explaining why. CPIH adds owner occupiers’ housing costs, which make up approximately 18% of CPIH, and the ONS calls it its most comprehensive measure. The ONS also publishes core CPI, which excludes energy, food, alcohol and tobacco, a wider exclusion than the US core. According to the Bank of England, the ONS collects around 180,000 prices of about 700 items.

Euro area. The European Central Bank aims for 2% inflation over the medium term, measured by the Harmonised Index of Consumer Prices (HICP). The ECB describes the target as symmetric: it treats inflation below 2% as just as undesirable as inflation above it.

When comparing countries, check which index each figure comes from and which items “core” excludes. The headline numbers are not built the same way.

Frequently asked questions

What time is the US CPI released? At 8:30 a.m. Eastern Time on the date in the BLS release schedule. Each release ends with the date of the next one.

What is the difference between CPI and core CPI? Headline CPI covers all items in the basket. US core CPI is all items less food and energy, which removes two of the most volatile groups so the underlying trend is easier to see.

Why does the 12-month rate rise when the monthly figure is low? The 12-month rate depends on the month that drops out as well as the one added. If the month leaving the comparison was weaker than the new one, the annual rate rises even when this month’s change is modest.

Is the CPI revised? The unadjusted CPI-U and CPI-W are final when issued. Seasonally adjusted figures are revised each February for the previous 5 years, and the chained CPI is preliminary at first and revised later.

Does the Fed target CPI inflation? No. The Fed’s 2% longer-run goal is measured by the annual change in the PCE price index. The Bank of England targets CPI, and the ECB targets the HICP.