[frposty]

It makes no sense to me why food and energy prices are omitted from the inflation measure. The article said Mr. Dudley was trying to explain, but the article did not give his explanation. Crummy article.

[mewykwistmas]

“It makes no sense to me why food and energy prices are omitted from the inflation measure. The article said Mr. Dudley was trying to explain, but the article did not give his explanation. Crummy article.”

His explanation is stupid: I can do without an iPad for many years, but I need bread and gas for my car every day.

[conejo99]

They do it because food and energy bounce up and down so much. The other items are included in other types of inflation numbers.
It makes sense to exclude volatile items from the numbers you use for some purposes. Otherwise you might have inflation prices rising 3% one month and then falling 2% the next. If you are trying to decide how much to increase the money supply other numbers might be more useful.
That being said, the iPod example seems to have some obvious problems. An iPod that is twice as powerful may be only 1% more useful. After all home many songs can I listen to at the same time,