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Is It Time to Add Food-at-Home Inflation to Measures of Core Inflation?

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Abstract

Since the mid-1970s, the Federal Reserve has used core inflation to examine trends in underlying inflation. Core inflation is considered a more stable measure as it excludes energy and food, historically viewed as the most volatile components of inflation. However, core inflation can be a challenge for central bankers to communicate, as food inflation is highly salient to consumers. We argue that food-at-home inflation has become less volatile over time and could be added to measures of core inflation with few drawbacks.

Suggested Citation

  • Amaze Lusompa & Jose Mustre-del-Rio & Jalen Nichols & Francisco Scott, 2025. "Is It Time to Add Food-at-Home Inflation to Measures of Core Inflation?," Economic Bulletin, Federal Reserve Bank of Kansas City, pages 1-4, June.
    • Handle: RePEc:fip:fedkeb:101180
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