""This is a wacky number," Diane Swonk, chief economist at KPMG, told Fortune. "Shelter costs basically flatlined October by carrying forward September. When housing is that large a component, that really matters.""
""We expected it to cool," Swonk said, "For this low level, it seems a little bit too much.""
""Because of the assumptions that were made in October, it literally anchors the index going forward," she said. "It lingers.""
Government-released November CPI showed consumer prices up 2.7% year-over-year and core inflation at 2.6%, a multiyear low. Economists flagged anomalies, especially in shelter, the largest CPI component. An extended government shutdown disrupted Bureau of Labor Statistics price collection in October and early November. When data collection resumed, missing observations could not be retroactively gathered, and the BLS relied on statistical assumptions that often carried forward prior prices. Those assumptions made shelter costs appear essentially flat in October, understating rent and owners' equivalent rent. The flat shelter reading damped core inflation and will anchor the index in subsequent months. Other oddities included seasonally adjusted gasoline increases and an unexpected drop in daycare costs.
Read at Fortune
Unable to calculate read time
Collection
[
|
...
]