Tuesday, September 8, 2015

Price Inflation Heat Map

Sorry for the poor graphic this is how it is on the St. Louis Fed site.

The above chart(comes via the St Louis Fed.

Even they have to admit that rent prices are climbing rapidly:
Most boxes for July are a shade of blue, indicating that the component indexes are under trend. However, the two largest shelter components measured in the map—owners’ equivalent rent of primary residence (OER) and rent of primary residence—have been above trend for the past several months. Another shelter component—lodging away from home—has been above trend for all but two months since February 2014...
Rent of primary residence measures the cost of shelter for renters. Renters are asked: “What is the rental charge to your [household] for this unit including any extra charges for garage and parking facilities? Do not include direct payments by local, state or federal agencies. What period of time does this cover?”
Regarding the impact on inflation, OER has been at or above its long-term average (2.2 percent) every month since June 2013, while rent of primary residence has been at or above its long-term average (2.8 percent) since May 2013.
It is also interesting to note that both of these components tend to be more persistent than the others over the past 10 years. That is, both OER inflation and rent of primary residence inflation change very little from month to month compared to the other series. This is illustrated in the figure above by the long stretches of red and blue for the OER and rent of primary residence components. Other components, such as energy, tend to switch between being above trend and being below trend much more frequently.


No comments:

Post a Comment