As the charts below illustrate, core CPI and core PCE are both well below the Federal Reserve's 2% target, sometimes referenced as a 1.75%-2% range.
The December 2010 core PCE of 0.73% was the lowest ever recorded. The October 2010 0.61% was the lowest core CPI ever recorded. However we've seen some divergence between the headline and core numbers for both indicators, and the latest CPI data for March shows a wider spread between Core and Headline. If gasoline prices continue to push higher, the spread is likely to widen further in the months ahead. Click to enlarge:
The Bureau of Labor Statistic's Consumer Price Index and The Bureau of Economic Analysis's monthly Personal Income and Outlays report are the main indicators for price trends in the US. The chart below is an overlay of core CPI and core PCE since 2000.
Here is a long-term perspective from the actual beginnings of the two series.
For some technical data explaining the differences between the two, see this comparison article from the BEA.
Naturally in the real world, we can't exclude food and energy from our monthly expenses. But the extreme volatility of these two categories, especially energy costs, often obscures the underlying trend, which is the focus of the chart above. For evidence of the volatility, see this overlay of headline and core CPI and this one of headline and core PCE.
Fuel on the Fire of Inflation Analysis
One the other hand, the volatile price of gasoline explains why so many people are angered by the exclusion of food and energy from core measures of inflation, as this chart of the past decade makes perfectly clear. The chart below is from the latest EIA data. As I type this, GasBuddy.com lists six states with an average price of regular above $4.00 (Hawaii, Alaska, California, Illinois, Connecticut and New York).