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Get Familiar With This Latest Economic Buzzword — Because It's Hurting Your Wallet Federal Reserve officials and economists have honed in on another inflation indicator.

By Amanda Breen Edited by Jessica Thomas

Andriy Onufriyenko | Getty Images

We might be in a rolling recession right now, but what can we expect going forward?

Federal Reserve officials and economists are trying to figure that out by examining data in new ways, and one of the hottest terms in their lexicon is "supercore inflation," which refers to prices that increase when workers get paid more for their labor, CNN reported.

Related: What New Entrepreneurs Should Know Amid Rising Inflation

The U.S. Bureau of Labor Statistics released its latest report on the Consumer Price Index, the most widely used of the monthly inflation gauges, today. The data revealed that the all items index increased 6.4% over the past 12 months before seasonal adjustment.

Although it's well below the 9.1% summer peak, the CPI suggests inflation is still quite high. But the supercore wage reading, which accounts for the price rises of a range of services — from haircuts to plumbing — has dropped off substantially, from an 8% annual rate in early 2022 to 5% in December, per the White House Council of Economic Advisers.

"The Fed focuses on supercore because it includes those prices that are more likely to be driven by the cost of labor, which the Fed can more directly impact through changes in interest rates," Mark Zandi, Moody's chief economist, told CNN, adding that supercore inflation is "still way too hot" but has started to cool off.

Related: Why Customer Communication Is Key, Especially With Inflation

Of course, the supercore inflation measurement doesn't account for categories like housing, food and energy — recurring expenses for most households — which continue to experience price pressures, per CNN.

Amanda Breen

Entrepreneur Staff

Senior Features Writer

Amanda Breen is a senior features writer at Entrepreneur.com. She is a graduate of Barnard College and received an MFA in writing at Columbia University, where she was a news fellow for the School of the Arts.

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