• By
  • Justin Lahart


As you can see, the headline CPI item is incredibly volatile, but seems to hew to the core measure over time.

But that isn’t the entire story. Here’s another chart showing the cumulative change in the headline and core CPIs since the end of 1999:

The core has risen 24.1% the headline has risen 29.4%. So except for those supermodels who don’t drive or eat, prices have risen more over the past decade than the core measure suggests.

That’s not to say the core isn’t generally a better guide to understanding what’s going on with underlying inflation; rather that there may be something going on with those noncore measures that is worth paying attention to. For example, rapid growth in developing markets may be bringing about a shift in global demand for commodities such as oil and grain that makes it unlikely that their prices will revert to the mean.



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