Inflation, Core Inflation, Sticky Inflation and What Does it All Mean?
Every month the Bureau of Labor Statistics publishes the consumer price index (CPI). The headline number is an attempt to show the change in prices for a fixed basket of goods that the average consumer buys. The largest component is housing, technically called shelter. Other components are autos, clothing, healthcare costs, food and energy. Food and energy are considered particularly volatile and less subject to long-term trends; therefore, they are often removed, and “core” inflation is reported without these two components. For August, headline inflation was up 8.3% year over…