There was an interesting comment on Bloomberg radio today about the calculation of the "core" rate of CPI measured inflation, i.e, that which excludes energy and food products. The commentator said the implied rent calculation (for measuring home shelter prices) actually is forced lower when natural gas prices increase. This is worth investigating. The implied home rent component has always been a squirrely part of the CPI calculations, going up when actual home sale prices are dropping and going down when home sale are ratcheting upwards.

The "core" number is the biggest crock of you-know-what I've ever smelled. To exclude food and energy makes it utterly meaningless as a gauge of consumer burden. Ignore it -- I do.

There's still some useful info in the core because gasoline and food can go down sharply as we saw little more than a year ago. At that point, the headline CPI showed rampant deflation whereas the Core showed about the same rate of inflation as it shows today. So, I disagree although I admit some of it is dubious. Also, remember two-thirds of all costs of goods is still wages and benefits, and we know this ain't going up very fast except'n if you're in government, an exec, or a high profile athlete. The core is more in line with labor wage rate change than the headline.