Headline Inflation

The raw inflation figure as reported through the Consumer Price Index (CPI) that is released monthly by the Bureau of Labor Statistics. The CPI calculates the cost to purchase a fixed basket of goods as a way of determining how much inflation is occurring in the broad economy. The CPI uses a base year and indexes current year prices based on the base year's values.

The headline figure is not adjusted for seasonality or for the often volatile elements of food and energy prices, which are removed in the Core CPI. Headline inflation will usually be quoted on an annualized basis, meaning that a monthly headline figure of 4\% inflation equates to a monthly rate that, if repeated for 12 months, would create 4\% inflation for the year. Comparisons of headline inflation are typically made on a year-over-year basis.

Also known as "top-line inflation".

Inflation is a great threat to long-term investors because it erodes the value of future dollars. Inflation can stifle economic growth and cause a rise in prevailing interest rates.

While headline inflation tends to get the most attention in the media, core inflation is often considered the more valuable metric to follow. Core inflation removes the CPI components that can exhibit large amounts of volatility month to month, which can cause unwanted distortion to the headline figure. Both headline and core results are followed closely by investors, and are also used by economists and central banking figures to set economic growth forecasts and monetary policy.


Investment dictionary. . 2012.

Look at other dictionaries:

  • headline inflation — ➔ inflation * * * headline inflation UK US noun [U] (UK headline rate of inflation [C, usually singular]) ECONOMICS ► the rate of inflation that includes prices that change a lot, for example, those of food and energy: »The increase in overall… …   Financial and business terms

  • Headline inflation — is a measure of the total inflation within an economy and is affected by areas of the market which may experience sudden inflationary spikes such as food or energy. As a result, headline inflation may not present an accurate picture of the… …   Wikipedia

  • headline inflation — bendroji infliacija statusas Aprobuotas sritis Ekonomika apibrėžtis Infliacijos rodiklis, apimantis visų vartotojo krepšelį sudarančių prekių ir paslaugų kainas. atitikmenys: angl. headline inflation; overall inflation šaltinis Lietuvos banko… …   Lithuanian dictionary (lietuvių žodynas)

  • headline inflation rate — /ˌhedlaɪn ɪn fleɪʃ(ə)n/ noun a British inflation figure which includes items such as mortgage interest and local taxes, which are not included in the inflation figures for other countries. Compare underlying inflation rate …   Dictionary of banking and finance

  • headline rate of inflation — UK US noun [C, usually singular] (UK ECONOMICS ► HEADLINE INFLATION(Cf. ↑headline inflation) …   Financial and business terms

  • inflation — The creation of money by monetary authorities. In more popular usage, the creation of money that visibly raises goods prices and lowers the purchasing power of money. It may be creeping, trotting, or galloping, depending on the rate of money… …   Financial and business terms

  • Inflation — The rate at which the general level of prices for goods and services is rising. The New York Times Financial Glossary * * * inflation in‧fla‧tion [ɪnˈfleɪʆn] noun [uncountable] ECONOMICS a continuing increase in the prices of goods and services …   Financial and business terms

  • inflation rate — /ɪn fleɪʃ(ə)n reɪt/ noun a figure, in the form of a percentage, which shows the amount by which inflation has increased over a period of time, usually a year. Also called rate of inflation ▪▪▪ ‘…the decision by the government to tighten monetary… …   Dictionary of banking and finance

  • inflation —    Spain has had on the whole a high inflation economy both before, during and after the period of rapid development of 1960–74, and it was only in the 1990s that the monetary authorities at last appeared to be on top of the problem. Already… …   Encyclopedia of contemporary Spanish culture

  • inflation — /ɪn fleɪʃ(ə)n/ noun a greater increase in the supply of money or credit than in the production of goods and services, resulting in higher prices and a fall in the purchasing power of money ♦ we have 3% inflation or inflation is running at 3%… …   Marketing dictionary in english

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.