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A measure of the total inflation that is experienced throughout an entire economy. Headline inflation is based off of the U.S. Bureau of Labor Statistics'Â Consumer Price Index (CPI). In contrast, the core CPI, which is used to mearue core inflation excludes price fluctuations in the food and energy sector due to their seasonal or volatile movements. See: Consumer Price Index (CPI), Inflation
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The total inflation present in an economy. That is, headline inflation indicates the percentage by which prices rise over a period of time without making any major adjustments. While headline inflation is a good indicator of the inflation that consumers feel, it may not accurately show the amount by which the value of a currency is reduced. This is because headline inflation includes changes in prices to things like food and energy, which are quite volatile and may move up or down independently of underlying inflation. For this reason, some analysts prefer to use the core inflation metric (which excludes volatile commodities) when calculating inflation. See also: CPI.
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