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5. Economists sometimes exclude food and energy prices from the headline con- sumer price index and use the resulting core price measure to assess inflation
5. Economists sometimes exclude food and energy prices from the "headline" con- sumer price index and use the resulting "core" price measure to assess inflation prospects. For the period since 1990, plot on one graph the percent change from a year ago of the consumer price index (FRED code: CPIAUCSL) and the per- cent change from a year ago of the consumer price index excluding food and energy (FRED code: CPILFESL). Visually compare the variability of these two measures of inflation. Why might inflation excluding food and energy be a better predictor of future inflation than headline inflation? (L04) 5. Economists sometimes exclude food and energy prices from the "headline" con- sumer price index and use the resulting "core" price measure to assess inflation prospects. For the period since 1990, plot on one graph the percent change from a year ago of the consumer price index (FRED code: CPIAUCSL) and the per- cent change from a year ago of the consumer price index excluding food and energy (FRED code: CPILFESL). Visually compare the variability of these two measures of inflation. Why might inflation excluding food and energy be a better predictor of future inflation than headline inflation? (L04)
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