1. Food and energy does factor into inflation. The government reports both top line CPI and Core CPI (excluding food and energy) because those components are volatile, not because they don’t count.
2. A conclusion you made is the opposite of what one would infer from the data you posted …
Inflation may have been a factor 01-02-03 but after that its not only down, its pretty much wiped out the gains from 01-02. Look at rents and look and costs of essentials and always they exclude energy because that is influenced by too many externals.
But the data you posted later on says the opposite. Core inflation actually declined from 01-03 and picked up again after that.
I took the liberty of plotting the data you provided.
A clear decline from 01-03 and a pick-up from 03 on. Exactly the opposite of what you said.
I also took the core inflation numbers and computed the cumulative impact of CORE inflation from 2000 to 2007. Guess what ? Excluding food and energy, things have gone up by a cumulative 16% since 2000. 16 > 0. People tend to underestimate the erosion effect of even mild (< 2%) inflation on the costs of things.
[img_assist|nid=3236|title=Cumulative effect of inflation 2000-2007|desc=|link=node|align=left|width=466|height=349]
This thread has taken a diversion from the original point. All I was trying to do was to point out a pile of BS that was not backed by data. When the data is provided, it contradicts the BS.
