The September consumer price index saw a 0.4% rise, with the cost of shelter accounting for over half of the increase at 0.6%, according to data released by the U.S. Labor Department on Thursday. Year-over-year, there was a 3.7% increase in CPI, with a significant jump of 7.2% in the shelter index.
According to Reuters, rent measures in CPI typically lag behind independent gauges by several months.“It remains to be seen if this is just a temporary spike or if there are underlying factors contributing to this rise such as higher rent prices in major cities offsetting softer increases in smaller ones,” stated Stephen Juneau from Bank of America Securities.
Chief economist Lawrence Yun from National Association of Realtors commented that rental growth is one factor preventing consumer prices from being fully controlled and why interest rates cannot be reduced by Fed policy makers.”However,” he added,”with multiple new apartment constructions underway,the pace at which rents are rising will inevitably slow down,resultingin lower inflation and interest rates next year.”
The article “Rent Costs Drive September CPI Increase” was originally published on Connect CRE’s website.
