Inflation Indicator

Traditionally, economists preferred looking at core inflation, which excludes food and energy vs. headline inflation as core is much less volatile. However, since Covid in 3/20, it’s become wildly volatile. Where in the past Core PCE inflation was bounded by changes of between 0.05%/month and 0.3%/month, now it bounces between 0.05%/month and 0.6%/month, or twice as much. Though this is quite troubling, it remains half as volatile as headline PCE.