CPI month-over-month data from the BLS, chart by Mish

Yet Another Groundhog Day for Rent

I repeat my core key theme for over two years now. People keep telling me rents are falling, I keep saying they aren’t. I thought this may finally be the month the rent trend breaks but it wasn’t.

Rent of primary residence, the cost that best equates to the rent people pay, jumped another 0.5 percent in November. Rent of primary residence has gone up at least 0.4 percent for 28 consecutive months!

The “rents are falling” (or soon will) projections have been based on the price of new leases. But existing leases, more important, keep rising.

According to the Census department, only 15 percent of renters move each year. It’s been a huge mistake thinking new leases and finished construction would drive rent prices.

With rents out of the way, Let’s tune into the BLS Report for the details. 

CPI Month-Over-Month Details

• The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.1 percent in November on a seasonally adjusted basis, after being unchanged in October.
• The index for shelter continued to rise in November, offsetting a decline in the gasoline index. Shelter rose 0.4 percent, rent of primary residence rose 0.5 percent, and Owners’ Equivalent Rent also rose 0.5 percent.
• The energy index fell 2.3 percent over the month as a 6.0-percent decline in the gasoline index more than offset increases in other energy component indexes.
• The food index increased 0.2 percent in November, after rising 0.3 percent in October. The index for food at home increased 0.1 percent over the month and the index for food away from home rose 0.4 percent.
• The index for all items less food and energy rose 0.3 percent in November, after rising 0.2 percent in October.

CPI Year-Over-Year

CPI Year-Over-Year Details

• Over the last 12 months, the all items index increased 3.1 percent before seasonal adjustment.
• The all items less food and energy index rose 4.0 percent over the last 12 months matching the year-over-year price in October.
• Shelter is up 6.5 percent from a year ago. Rent of primary residence is up a whopping 6.9 percent from a year ago.
• The energy index decreased 5.4 percent for the 12 months ending November, while the food index increased 2.9 percent over the last year.

Why Are Americans in Such a Rotten Mood?

Repeating what I said a month ago, other than the huge drop in energy, this was not a benign report.

For discussion, please see Why Are Americans in Such a Rotten Mood? Biden Blames the Media

People can cut back on some things but rent and food are not in that list.

For the 36 percent of the nation that rents, Bidenomics has been a complete disaster.

Is the BLS Is Overstating Rent and Exaggerating Inflation?

On December 7, I investigated A Curious Claim that the BLS Is Overstating Rent and Exaggerating Inflation

I provide solid evidence that the BLS has been doing no such thing.

Nonetheless, assume inflation slows along with rent. At some point it’s bound to happen.

The key question then becomes: Was inflation transitory or is it the easing that’s transitory?

Please see the above link for my take on inflationary pressures and how long they might last.

More By This Author: