Housing Costs Continue to Drive Inflation Even as Overall Pace Slows
By Isabelle Durso August 14, 2024 12:58 pm
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Housing costs in the U.S. are still on the rise even as inflation overall cools down, according to the latest Consumer Price Index (CPI) report released on Wednesday morning.
The CPI rose 0.2 percent in July after declining 0.1 percent in June, the U.S. Bureau of Labor Statistics said. Overall, the CPI increased 2.9 percent over the last 12 months, representing the first time the rising cost of consumer goods has slowed to below 3 percent since 2021, Reuters reported.
A spokesperson for the BLS did not immediately respond to a request for comment.
While inflation has started to slow, the main driver of the increases continues to be housing costs. The shelter index within the CPI was up 0.4 percent in July and accounted for almost 90 percent of the monthly increase in all items, the report found. The index for rent rose 0.5 percent over the month and ownership increased 0.4 percent, according to the report.
In the greater New York area, consumer prices rose 0.3 percent in July — driven primarily by higher housing costs — and energy and gasoline prices went up by 0.5 percent, respectively, according to data from the Labor Department. Meanwhile, food costs declined by 0.3 percent in July.
Over the past year, the New York area’s CPI increased by 4.1 percent, food prices rose by 1.7 percent, energy prices surged 7.1 percent, and prices for all items less food and energy went up by 4.3 percent, the Labor Department found.
The new data comes amid anticipation of the Federal Reserve cutting interest rates in September. The central bank had set an inflation target of 2 percent when it began raising rates in early 2022.
While consumer prices have mostly cooled from June 2022’s peak inflation rate of over 9 percent, inflation is still increasing as a crucial 2024 presidential election nears.
The Labor Department collects data for CPI reports from about 6,000 households and 22,000 retailers across 75 U.S. cities every month.
Isabelle Durso can be reached at idurso@commercialobserver.com.
