Temporary shocks to food and energy prices typically don’t translate into changes in inflationary pressure. However, if these shocks persist, they may have an effect on core inflation and, more generally, on the economic behavior of households and businesses.
Core inflation can be affected when the price changes are propagated along the production chain - say from oil prices to the prices of chemicals and ultimately to the prices of goods made with those chemicals. In addition, the shocks to food and energy prices may affect inflation expectations. Thus, we also pay attention to broader measures of inflation.