How did core inflation (excluding food and energy) trend from 2017 to 2020?
Executive summary
Core inflation — the CPI measure that excludes food and energy — was broadly steady and close to the Federal Reserve’s long-run view in the three years before the pandemic, averaging just above 2% from 2017 through 2019, and showed no large upward trend in that window; 2020, the pandemic year, interrupted typical patterns but did not produce the dramatic sustained rise in core inflation that followed in 2021–2022, though short-run distortions make a single characterization of 2020’s trend difficult [1] [2].
1. Stable, near-2% core inflation across 2017–2019
From 2017 through 2019 core inflation was largely tame and clustered around roughly 2% per year, a fact economists flagged as a return to the “quiescent” inflation regime that precedes the pandemic: researchers note the 12‑month CPI inflation rate averaged about 2.1% over 2017–2019, and core indexes were not signaling a sustained breakout before 2020 [1] [2].
2. 2020: a year of disruption, not a clear new trend
The arrival of COVID‑19 in early 2020 produced sudden economic shocks — lockdowns, demand swings, and supply‑chain interruptions — that changed month‑to‑month price dynamics and made annual comparisons noisy; analysts and official summaries show that while some prices plunged and others rebounded, core measures over 2020 did not immediately establish the high, persistent core inflation seen later, and slides from agencies like the CBO characterize 2020 as the point when inflation patterns were disrupted rather than permanently re‑set [3] [2].
3. Measurement and seasonality complicate the 2020 reading
Core CPI is available monthly from the BLS and summarized in long‑run series such as FRED, but seasonal swings and index weighting (for example shelter versus other services) mean short windows can mislead: official sources and data vendors emphasize that core CPI (CPI less food and energy) is the preferred indicator for underlying inflation trends, yet analysts also warn that 2020’s unusual sectoral shifts make interpreting year‑over‑year core changes more uncertain than usual [4] [5].
4. What the pre‑2021 patterns imply about 2020’s signal
Because core inflation averaged a little above 2% in 2017–2019, the absence of a sustained surge in 2020 implies the pandemic year did not itself create the multi‑year core inflation spike that policymakers and markets later experienced; academic decomposition and policy commentary attribute the much larger rise in inflation to forces that intensified after 2020 (labour‑market tightness, large relative‑price changes, and expectations), underlining that 2020 was transitional rather than the origin of persistent core inflation [1] [2].
5. Caveats, alternate measures, and limits of this reading
Different core measures (CPI‑based core CPI versus the Fed‑preferred core PCE) have different weights and can show slightly different magnitudes and timing, so statements about “trend” depend on which index is used; the reporting assembled here relies primarily on CPI‑based core series and summary research that reports an average of about 2.1% for 2017–2019 and highlights 2020 as a disruptive year — sources do not provide a single definitive numeric for calendar‑year 2020 core CPI in the snippets provided, and therefore this account emphasizes pattern and context rather than asserting a single precise 2020 annual figure [1] [2] [4].
Conclusion: A concise read
Core inflation was steady around 2% in the pre‑pandemic years 2017–2019 and 2020 should be read as a break in ordinary patterns — producing volatility and sectoral reshuffling but not (based on the sources available here) a clean, sustained step‑up in core inflation that would later materialize more clearly in 2021–2022; differences between CPI and PCE measures and pandemic‑era data noisiness mean the middle of 2020 is best described as transitional and ambiguous rather than definitively higher or lower on an enduring basis [1] [3] [2].