The headline number was hotter than we, or the consensus, expected. But as expected, rising owners' equivalent rent added over 1% at an annual rate in January.
What you're not hearing about today's godawful CPI
Thursday, February 10, 2022
The Bureau of Labor Statistics just made inflation more transitory.
Update to Strategic View
Just three categories explain most of it. As a small number of categories experience especially high inflation, their weighting in the index automatically rises, making their impact increasingly damaging -- even if consumers, in fact, are buying less of those items. The BLS introduced new weights today in their usual bi-annual process. Based on pandemic-era consumer data, the weights in the most inflamed categories went up. As supply chains are repaired, and price of items in scarcity fall back to more normal levels, these higher weights mean their disinflationary impact on the way down will be greater than their inflationary impact on the way up.