It is the mud weight plus the annular friction, expressed back as a density, usually in pounds per gallon. The bit and the formations see this higher value, not the mud weight printed on the report. It rises with pump rate, with a narrow annulus, and with a high yield point.
The comparison that matters for losses is this circulating density against the fracture gradient, not the static mud weight against it. Stopping the pumps drops the pressure back toward the static mud weight, which is why a well can lose mud while drilling and go quiet on a connection.