Groundwork releases analysis showing inflation is lower than it seems
Today’s Consumer Price Index (CPI) Report showed an uptick in headline inflation to 0.6% in August, over half of which was caused by a whopping 10.6% increase in gasoline prices. “Core inflation,” or all items less food and energy, rose only 0.3% in August, and year-over-year core inflation slowed to 4.3%. Groundwork’s Acting Executive Director Kitty Richards shared the following statement:
“Over the past few months, we have seen rapidly falling inflation amid rising wages and a record spell of low unemployment, despite the Federal Reserve’s misguided rate hiking campaign, not because of it. And in fact, if you look at what’s happening in the housing market, real-world inflation is even lower than it appears.
“Chair Powell can’t make homes more affordable or control oil prices by kicking workers out of their jobs. If we care about the cost of living, we need to focus on investing in people and families. That means empowering workers, delivering affordable housing and child care, and building our clean energy future.”
Email press@groundworkcollaborative.org to speak with Kitty Richards about today’s CPI report and Groundwork’s shelter inflation calculation.
GROUNDWORK’S SHELTER INFLATION ANALYSIS:
Following the release of the new CPI numbers, Groundwork Collaborative shared a new analysis showing that if current-market rental rates, as measured by the Zillow Observed Rent Index, are substituted for the BLS measure of shelter costs in the CPI calculation, headline inflation is at 2.4%. That is more than a percentage point lower than official measurements suggest. Further, this calculation shows that all-items inflation was already below the Fed’s 2% target in June and July. You can learn more about Groundwork’s analysis here.