The consumer price index (CPI) is a measure of average change in price that is paid by consumers in urban area for consumption of goods and services .Core inflation is the change in the costs of goods and services but does not include those from the food and energy sectors. They are excluded because they are volatile in nature. Due to liable to change rapidly and unpredictably,monetary authorities may be inclined to change interest rates more frequently.Graph shown below state the level of variability in both cases :In diagram above we see rise in energy prices leads to 5 percent cost pull inflation and a time later , economy in Recession. In other words CPI including food and energy prices may give misleading impression of underlying inflationary pressures. If you tried to stop the inflation caused by food and energy prices , you are on way to slow down economy . And again in case when there is increase in food and energy prices , there is possibility that monetary policy can become too lax, creating future underlying inflation. That's why economist avoid Headline inflation for the future predictability and use normal CPI excluding food and energy prices.

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