Please consider the BLS CPI Report for March 2023.

Month-Over-Month Details 

• The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent in March on a seasonally adjusted basis, after increasing 0.4 percent in February.
• The index for shelter was by far the largest contributor to the monthly all items increase. This more than offset a decline in the energy index, which decreased 3.5 percent over the month as all major energy component indexes declined. 
• The food index was unchanged in March with the food at home index falling 0.3 percent. 
• The index for all items less food and energy rose 0.4 percent in March, after rising 0.5 percent in February. 
• Indexes which increased in March include shelter, motor vehicle insurance, airline fares, household furnishings and operations, and new vehicles. 
• The index for medical care and the index for used cars and trucks were among those that decreased over the month. 

CPI Year-Over-Year

Year-Over-Year Details

• The all items index increased 5.0 percent for the 12 months ending March; this was the smallest 12- month increase since the period ending May 2021.
• The all items less food and energy index rose 5.6 percent over the last 12 months.
• The energy index decreased 6.4 percent for the 12 months ending March
• The food index increased 8.5 percent over the last year. 
• The shelter index is up 8.3 percent over the last year. 

CPI Shelter Remains Hot

Shelter Notes

• Shelter comprises 34.47 percent of the CPI
• Rent of primary residence is standard rent (not owner occupied), unfurnished without utilities.
• Owners' Equivalent Rent (OER), is the estimated price one would pay to rent one's own house, unfurnished and without utilities. It is the single largest CPI component at 25.41 percent.
• The shelter index increased 8.2 percent over the last year, accounting for over 60 percent of the total increase in all items less food and energy. 

Price of Shelter

Shelter has gone up at least 0.5 percent for 14 consecutive months dating to January 2022.

Most analysts have been expecting the price of shelter to come down. I have not been in that camp and still are not, although we are getting closer to smaller increases.

 Mish Shelter Flashbacks

• Oct 31, 2022: Rent Prices Have Declined Two Straight Months, But What Does It Mean? Rent prices are declining month-over-month but don't read too much about inflation into the decline.
• December 8, 2022: Ignore the Pundits, Don't Expect Big Declines in the Price of Rent. The price of rent appears to be falling rapidly. But some of that is seasonal, the rest is likely a mirage.
• January 5, 2023: National Rent Prices Decline Again, But Reports Are Very Misleading. Apartment List reports the fourth consecutive drop in apartment rent prices but that may not translate to your next lease.
• February 2, 2023: National Rent Prices for New Leases Drop for the 5th Month. The price on new apartment leasers declines again, but when do existing renters get a break?

• On March 7 I asked The Fed Chair Puts a Spotlight on Rent, Has Rent Really Stabilized?

  We can easily see the answer is still no judging from another 0.8 percent rise month-over-month in the shelter index in February and another 0.6 percent in March.

False Dawns 

National Rent Price data from Apartment List, CPI data from the BLS, chart by Mish

All these "rent is declining" false dawns have been wrong for three reasons.

1. They are based on new leases, not existing leases.
2. They report increases all at once whereas the BLS smooths things out over a 12-month period due to the fact that not all leases renew in the same month.
3. Seasonality

In the months ahead we may finally see rents ease due to the fact there are a record number of apartments under construction. Just don't expect to see declines. 

Meanwhile, the price of crude has taken off. Don't expect energy to be another big savior in the April CPI report. 

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