The Consumer Price Index (CPI), released by the Bureau of Labor Statistics (BLS), rose in October. Both headline inflation and core inflation increased.

The CPI rose at a seasonally adjusted annual rate of 4.4%, faster than the two previous increases (2.5% in August and 3.6% in September). Excluding the volatile food and energy components, “core” CPI rose at a seasonally adjusted annual rate of 1.8%, following a 1.4% increase in September.

The price index for a broad set of energy sources increased at an annual rate of 50.7%, after a 41.5% increase in September. The index for food and beverages was unchanged. Similar to last month, in October the increase in energy prices accounted for most of the increase in headline inflation.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components).

After declines during the recession, inflation in real rents accelerated from 2012 to 2014, a period of strong recovery in the multifamily sector, reaching a peak average annual rate of 1.7% in 2014. Real rent inflation has hovered in a very narrow range in 2015 and 2016.

Tags: core inflation, cpi, energy prices, headline inflation, multifamily, real rent index