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Core Inflation Still Moderate, But Rent Increases Are Grounds for Concern

The overall picture is still transitory with the overall CPI up 0.4 percent, and the core just 0.2 percent. Cars will come down in price one day. Food and energy may take longer. Food is affected by climate, so denialists will have to eat this.

  • New vehicle prices continue to rise rapidly, up 1.3 percent; the fifth straight month over 1.0 percent. Used vehicle prices fall 0.7 percent. Year-over-year, up by 8.7 percent and 24.4 percent, respectively.
  • Food prices are up 0.9 percent, 4.6 percent year-over-year; it’s the climate change special. Food away from home is up just 0.5 percent, 4.7 percent year-over-year. It doesn’t seem like higher wages are leading to price increases.
  • College tuition prices are up 0.5 percent in September, 1.7 percent year-over-year. Daycare is up 0.7 percent and 2.4 percent, year-over-year.
  • Prescription drug prices are up 0.8 percent in September, but still down 1.6 percent year-over-year.
  • The medical services index fell 0.1 percent after rising 0.3 percent for two consecutive months; up 0.9 percent year-over-year. This is very good news and is not a problem area for now.
  • Health insurance prices are down 1.0 percent, 9.4 percent year-over-year. These are administrative costs and profits, not premiums.
  • Rent proper rises 0.5 percent in September, and owners’ equivalent rent is up 0.4 percent; that’s 2.4 percent and 2.9 percent year-over-year, respectively.
  • Rental inflation will be huge going forward. Part of the recent rent uptick is catch-up. Since the pandemic, the rent index has risen at a 2.4 percent annual rate, and the owners’ equivalent rent is at 2.6 percent.
  • There are differing rent stories across cities, with slowing in Los Angeles, Seattle, San Francisco, and New York City, but rising in many lower-priced cities.


This is a compilation of Dean Baker’s quick-take analysis over Twitter. Follow @DeanBaker13 on Twitter to get his quick-take analysis of government data immediately upon release.

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