THE Federal Reserve looks at a lot of different data points when considering the economy's rate of inflation, but its preferred measure is a core measure, which strips out the volatile energy and food components. Other central banks, including the European Central Bank, prefer to focus on headline inflation. This is understandable; people pay for the volatile components just as they pay for the core components. But making policy around headline numbers may add to instability in some cases.

In the summer of 2008, for instance, rising oil prices caused headline consumer prices in America to soar. At the same time, however, core inflation was flat, and inflation expectations were actually falling. Had the Fed tightened policy at this time, it would have undermined the American economy just as the financial crisis was developing—essentially repeating the monetary errors of 1929. Happily, the Fed's focus on core inflation prevented this. Had the Fed focused more on inflation expectations, it would have acted more aggressively still, sparing the economy some of the pain of the second half collapse.

I mention this because, as I noted, the ECB focuses on headline inflation and European headline inflation is rising. In January, headline producer prices jumped 1.5% from the previous month and 6.1% from the previous year. That was well ahead of economist expectations. Energy costs were the main factor; headline prices rose twice as much as core prices, and the increase in core was largely due to producers passing on their higher energy costs to consumers. This trend is sure to continue in the short-term. In the month of February, a barrel of Brent crude oil rose in price by about $15. And the hawkish, headline-oriented ECB may well respond by tightening policy.

But this would be a mistake. For an inflation spiral to begin, it's not sufficient for firms to pass on energy costs to customers. Those customers must then demand higher wages, which are themselves higher firm costs. But most European workers are in no shape to bargain for wage increases. The euro zone unemployment rate is currently at 9.9%, essentially unchanged from a year ago.

The problem for Europe is that its core economy, and the dominant voice in euro zone monetary policy, is Germany. Germany's unemployment rate is just 6.5%, and it's down from 7.3% a year ago. Wage pressures may well be surfacing in the German economy. And that will make some ECB officials very nervous.

It shouldn't. Tightening in response to rising German wages would be doubly harmful to struggling peripheral countries. It would make an inappropriately harsh (for them) monetary policy harsher still. And by preventing any wage increase in Germany, it would undermine a process of internal euro-zone rebalancing that really needs to take place.

But I don't expect these concerns to get much of a hearing in Frankfurt. And I suspect that the people making similar arguments in London may also be disregarded.