Consumer Prices Increase Broadly in May

June 17, 2014

Consumer prices in May experienced the largest monthly increase since February 2013. According to data released by the Bureau of Labor Statistics (BLS), consumer prices increased 0.4% on a seasonally adjusted month-over-month basis. Year-over-year, before seasonal adjustments, prices on expenditures made by urban consumers increased 2.1%. The increase was broad, affecting many items found in the consumer basket such as energy, food, and shelter.

Over the past twelve months, the shelter index increased 2.9% before seasonal adjustments. The shelter index rose 0.3% month-over-month in May after increasing 0.2% month-over-month in April.

NAHB constructs a real price index by deflating the price index for rent by the index for overall inflation. This measure indicates whether inflation in rents is faster or slower than general inflation and provides insight into the supply and demand conditions for rental housing, after controlling for overall inflation. When rents are rising faster (slower) than general inflation the real rent index rises (declines). However, given that the price index for overall inflation has been reflecting the recent volatility in energy prices using the core index, which excludes food and energy prices, may provide a more reliable comparison between rents and overall inflation.

The NAHB constructed real rent index increased nominally in May. Over the past year, real rental prices rose by 1.1%.

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With respect to other consumer prices, the food index continued its ascent, rising by 0.5% in May on a seasonally adjusted basis. Over the past twelve months the food index increased by 2.5% before seasonal adjustments. The index for meats, poultry, fish, and eggs, a component of the food index, experienced an increase of 1.4% in May after a 1.5% increase in April.

In May, the energy index increased by 0.9% before seasonal adjustments. The increase was driven largely by a monthly increase of 2.3% in the electricity index. Over the past twelve months the energy index increased by 3.3% before seasonal adjustments. The gasoline index, a component of the energy price index, also increased in May, by 0.7% for the month.

The core CPI rose by 0.3% on a seasonally adjusted month-over-month basis and 2.0% for the year before seasonal adjustments. The Core CPI excludes more volatile food and energy prices.

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Food, Energy, and Shelter Prices Rise in April

May 15, 2014

The Bureau of Labor Statistics (BLS) reported that consumer prices increased by 0.3% in April after a 0.2% increase in March. Over the past twelve months, prices on expenditures made by urban consumers increased 2.0% before seasonal adjustments. This is the largest twelve month increase since July of last year.

Indexes for food, energy, and shelter all rose in April. The food index increased by 0.4% for the month as the price of meats, poultry, fish, and eggs all rose. Over the past twelve months, the food index has increase by 1.9%.

The energy index increased 0.3% on a month-over-month seasonally adjusted basis. Gasoline, a component of the energy index, rose by 2.3% month-over-month. Over the past twelve months, the energy index has increase by 3.3%.

The Core CPI, which excludes more volatile food and energy prices, rose by 0.2% on a seasonally adjusted month-over-month basis. The Core CPI rose by 1.8% for the year before seasonal adjustments.

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Over the past twelve months, the shelter index increased 2.8% before seasonal adjustments. The shelter index rose 0.2% month-over-month in April after increasing 0.3% month-over-month in March.

NAHB constructs a real rent price index to isolate the change in rental prices. The NAHB constructed measure indicates whether inflation in rents is faster or slower than general inflation and provides some insight into the supply and demand conditions for rental housing, after controlling for overall inflation. The real rent index increased in April by 0.1% month-over-month and 1.2% for the year.

 

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Natural Gas Prices Increase Sharply in March

April 15, 2014

Over the past 12 months, according to data released by the Bureau of Labor Statistics (BLS), prices on expenditures made by urban consumers increased 1.5% before seasonal adjustments. Consumer prices increased in March by 0.2% on a seasonally adjusted month-over-month basis.

Two important components of the residential utility bill (natural gas and electricity) increased in March. The natural gas index, a component of the energy price index, increased sharply month-over-month by 7.5%. This was the largest month-over-month increase since October 2005. Over the past twelve months the natural gas index increased by 16.4%. The electricity index increased month-over-month by 1.1% and 5.3% over the past twelve months.

The energy index fell for the second consecutive month by 0.1% on a month-over-month seasonally adjusted basis. The increases in natural gas and electricity were offset by a decrease in gasoline and fuel oil; all components of the energy index.

For the second consecutive month, the food index rose by 0.4%. Over the past twelve months, the food index increased by 1.7%. The index for meats, poultry, fish, and eggs increased 5.1% over the past twelve months.

The core CPI rose by 0.2% on a seasonally adjusted month-over-month basis and 1.7% for the year before seasonal adjustments. The Core CPI excludes more volatile food and energy prices.

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The shelter index rose 0.3% month-over-month in March after increasing 0.2% in February.  Over the past twelve months, the shelter index increased 2.7% before seasonal adjustments.

Because shelter costs represent a large share of the average consumer’s expenditures, a 0.3% month-over-month increase is worth exploring further. Although the increase in the shelter index partly reflects increases in rental prices, the BLS measure does not isolate the change in rental prices from the changes in the overall price index. NAHB constructs a real rent price index to isolate the change in rental prices. The NAHB constructed measure indicates whether inflation in rents is faster or slower than general inflation and provides some insight into the supply and demand conditions for rental housing, after controlling for overall inflation. The real rent index increased in March by 0.1% month-over-month and 1.2% for the year.

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Consumer Prices Edge Up

March 19, 2014

According to data released by the Bureau of Labor Statistics (BLS), prices on expenditures made by urban consumers increased 1.1% before seasonal adjustments over the past twelve months. Consumer prices increased in February by 0.1% on a seasonally adjusted month-over-month basis.

The Core CPI, which excludes more volatile food and energy prices, rose by 0.1% month-over-month. Over the past twelve months Core CPI increased by 1.6%.

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The food index rose sharply by 0.4% month-over-month, its largest increase since 2011. Over the past twelve months the food index increased by 1.4%. The index for meats, poultry, fish, and eggs, a component of the food index, experienced the largest month-over-month increase of 1.2% on a seasonally adjusted basis. Over the past twelve months the index for meats, poultry, fish, and eggs increased by 4.0%.

The energy index fell 0.5% on a month-over-month seasonally adjusted basis after two consecutive months of increases. The month-over-month decline in the energy index was driven by a 1.7% decrease in the gasoline index. Over the past twelve months the gasoline index decreased by 8.1%.

The natural gas index, a component of the energy price index, experienced the second consecutive month-over-month increase of 3.6% on a seasonally adjusted basis. Over the past twelve months the natural gas index increased by 8.3%.

The shelter index rose 0.2% month-over-month in February after increasing 0.3% month-over-month in January.  Over the past twelve months, the shelter index increased 2.6% before seasonal adjustments.

The increase in the shelter index partly reflects increases in rental prices; the BLS measure does not isolate the change in rental prices from the changes in the overall price index. NAHB constructs a real price index by deflating the price index for rent by the index for overall inflation. This measure indicates whether inflation in rents is faster or slower than general inflation and provides insight into the supply and demand conditions for rental housing, after controlling for overall inflation. When rents are rising faster (slower) than general inflation the real rent index rises (declines).

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The real rent index has increased for thirteen consecutive months. The real rent index increased in February by 0.1% month-over-month and 1.2% over the past year.


Natural Gas and Electricity Prices Increase Sharply in January

February 20, 2014

According to data released by the Bureau of Labor Statistics (BLS), consumer prices increased in January slightly by 0.1% on a seasonally adjusted month-over-month basis. Over the past twelve months, prices on expenditures made by urban consumers increased 1.6% before seasonal adjustments.

The month-over-month increase in the all items index was driven by a 0.6% increase in the energy price index. The natural gas index, a component of the energy price index, experienced the largest month-over-month increase of 3.6% on a seasonally adjusted basis. The electricity index also experienced a large increase of 1.8% on a seasonally adjusted month-over-month basis. Over the past twelve months, the natural gas index increased 4.9% and electricity index increased 4.4% before seasonal adjustments.

Utilities bills (natural gas and electric) are an important part of residential expenditures. A large increase in prices during an especially cold winter can impede expenditures on other goods. Of course, consumption expenditures on utility bills vary by state and the age of the housing stock. In general, older homes are less energy efficient than new construction.

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The Core CPI, which excludes more volatile food and energy prices, rose by 0.1% month-over-month. Over the past twelve months Core CPI increased by 1.6%.

The shelter index rose 0.3% month-over-month in January after increasing 0.2% month-over-month in December.  Over the past twelve months, the shelter index increased 2.6% before seasonal adjustments.

Because shelter costs represent a large share of the average consumer’s expenditure’s, a 0.3% month-over-month increase is worth exploring further. Although the increase in the shelter index partly reflects increases in rental prices, the BLS measure does not isolate the change in rental prices from the changes in the overall price index. NAHB constructs a real rent price index to isolate the change in rental prices. The NAHB constructed measure indicates whether inflation in rents is faster or slower than general inflation and provides some insight into the supply and demand conditions for rental housing, after controlling for overall inflation.

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The real rent index has increased for twelve consecutive months. The real rent index increased in January by 0.1% month-over-month and 1.2% over the past year.


Real Rents Continue to Rise

January 16, 2014

In December, consumer prices increased by 0.3% on a seasonally adjusted month-over-month basis according to data released by the Bureau of Labor Statistics (BLS). Over the past twelve months, prices on expenditures made by urban consumers increased 1.5% before seasonal adjustments. Month-over-month increases in the shelter and energy were major drivers.

The energy price index increased by 2.1% month-over-month after two months of decline. The gasoline index, a component of the energy price index, experienced a large month-over-month increase of 3.1%. The index for natural gas saw a decrease for the third straight month, dropping 0.4%.

The Core CPI, which excludes more volatile food and energy prices, rose by 0.1% month-over-month. Over the past twelve months Core CPI increased by 1.7%.

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Shelter costs represent a large share of the average consumer’s expenditures. The shelter index rose 0.2% month-over-month in December after increasing 0.3% month-over-month in November. Over the past twelve months, the shelter index increased 2.5% before seasonal adjustments.

The increase in the shelter index partly reflects increases in rental prices. The BLS measure does not isolate the change in rental prices from the changes in the overall price index. NAHB constructs a real price index by deflating the price index for rent by the index for overall inflation. This measure indicates whether inflation in rents is faster or slower than general inflation and provides insight into the supply and demand conditions for rental housing, after controlling for overall inflation. When rents are rising faster (slower) than general inflation the real rent index rises (declines).

The real rent index has increased for eleven consecutive months. For the December data, the real rent index increased by 0.2% month-over-month and 1.1% over the past year.

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Real Rents Up 1.2% Over Last Year

October 30, 2013

In September, consumer prices rose by 0.2% on a seasonally adjusted month-over-month basis according to data released by the Bureau of Labor Statistics (BLS). Over the past twelve months, prices on expenditures made by urban consumers increased 1.2% before seasonal adjustments.

Data collection for the estimates occurred prior to the government shutdown; however the release of data was delayed by two weeks. Next month’s release has also been pushed back five days, with the original schedule back on track starting in December.

The September release shows a slight increase from last month. In August, the Consumer Price Index – Urban Consumer (CPI) increased by 0.1% month-over-month.

The energy price index accounted for about half of the month-over-month increase for all items. The index increased by 0.8% month-over-month in September after decreasing 0.3% in August. All components of the energy price index rose in September with the index for natural gas experiencing the largest month-over-month increase. The index for natural gas rose 1.8% month-over-month in September after decreasing 2.3% in August and 2.8% decrease in July.

Core CPI, which excludes more volatile food and energy prices, rose by 0.1% month-over-month in September for the second consecutive month. Over the past twelve months Core CPI increased by 1.7%.

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The shelter index rose 0.2% month-over-month in September for the fourth consecutive month.  Over the past twelve months, the shelter index increased 2.4% before seasonal adjustments.

Because shelter costs represent a large share of the average consumer’s expenditure’s, a 0.2% month-over-month increase is worth exploring further. Although the increase in the shelter index partly reflects increases in rental prices, the BLS measure does not isolate the change in rental prices from the changes in the overall price index. NAHB constructs a real rent price index to isolate the change in rental prices. The NAHB constructed measure indicates whether inflation in rents is faster or slower than general inflation and provides some insight into the supply and demand conditions for rental housing, after controlling for overall inflation.

The real rent index has increased for eight consecutive months. In September, the real rent index rose by 0.1%. Over the past year, the real rental prices have risen by 1.2%.

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