Food is excluded from the Consumer Price Index (CPI) basket when calculating core inflation because food prices tend to be more volatile and subject to temporary fluctuations due to factors such as weather conditions, crop yields, and supply chain disruptions. Excluding food helps to provide a more stable and reliable measure of underlying inflation trends, allowing policymakers and economists to better assess the long-term price changes in other goods and services and make effective monetary and fiscal policy decisions.
Food is sometimes excluded from the Consumer Price Index (CPI) basket when calculating core inflation because food prices can be volatile and influenced by temporary factors, such as weather and seasonal fluctuations. By excluding food, economists can get a clearer picture of underlying inflation trends, which helps inform monetary policy decisions.
