Why does Fed exclude oil and food in the core soncumer price index?

Economists often exclude food and energy price movements when evaluating the underlying level of inflation. Food and energy price movements tend to be relatively volatile in the short-to-intermediate terms, making only transitory impacts on the all items CPI.





Large rises in these prices are often followed by large decreases, and vice versa. Volatility in food and energy price movements, such as that caused by unusual weather conditions, is generally self-correcting. Inclement weather often leads to temporary food shortages and temporarily increased demand for household fuels. Sustained shifts in food and energy prices, of course, will affect overall inflation.Why does Fed exclude oil and food in the core soncumer price index?
Actually, they report CPI with those items and without. The reason the CPI excluding energy and food is even focused on is because those items are the most volatile and people who use CPI (bankers, investors, business people, etc.) understand that over time the core CPI, or the number excluding food and energy, is the most meaningful number.Why does Fed exclude oil and food in the core soncumer price index?
cuzz they have amillion packets in one truck
I think their reason is that historically these prices fluctuated very little compared to other things, but, between you and me, it's so that they can keep their numbers down, so that it doesn't look like inflation is as bad as it is, so that people are content with their stagnant wages.