Why does my AM radio signal suffer in the downtown core of the city I live in?

Because the signal gets blocked by the buildings. AM signals are direct "line of site" signals. That means you have to be in direct line with the station's radio towers to receive the signal. The static you hear when you are downtown is probably from some other type of transmitter that you are picking up through your radio. With radios that are not shielded very well you can hear engine noise through the radio.