Today’s Consumer Price Index (CPI) Report showed a drop in month-over-month inflation to 0.4% in September. While this is still elevated, it was primarily driven by higher measured prices for shelter. However, CPI shelter costs are not representative of current macroeconomic conditions: measured inflation is lower when more up-to-date measures of rental prices are taken into account. Core inflation (stripping out volatile food and energy components) also came in lower at 0.3%, but this still includes lagged shelter cost inflation.
Groundwork’s Acting Executive Director Kitty Richards reacted with the following statement:
“Today’s inflation report confirms that we never had to sacrifice low unemployment for lower prices – we can have both. As supply chain snags unwind and public investment makes its way through our economy, inflation continues to cool.
“This report underscores the importance of understanding the key drivers of inflation and the limits of CPI measurement. While headline inflation reported by the BLS shows shelter inflation picked up this month, up-to-date rent data shows inflation is lower than official reporting suggests.
“Strong public investment has played a critical role in our economic recovery over the last two years and workers are now seeing higher wages and better benefits as a result. But to protect these critical gains for workers and promote economic stability, we must avoid the knee-jerk reaction of raising rates and instead remember that a thriving economy depends on the economic security of the people who drive it. Raising interest rates yet again would only hinder our progress towards building an economy that works for all of us.”
Email press@groundworkcollaborative.org to speak with Kitty Richards about today’s inflation numbers.