In November, consumer prices increased by 6.8% from a year ago. It marks the largest year-over-year gain since June 1982. Supply-chain constraints and strong consumer demand related to the pandemic and the reopening of the economy have contributed to recent price increases in some sectors.
The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.8% in November on a seasonally adjusted basis, following an increase of 0.9% in October. Excluding the volatile food and energy components, the “core” CPI increased by 0.5% in November, after a 0.6% increase in October. In November, the price index for a broad set of energy sources increased by 3.5% in November, after a 4.8% increase in October. Gasoline (all type) rose by 6.1% in November, the same increase as in October. It marks its sixth consecutive monthly increase. The food index rose by 0.7% in November as the index for food at home increased by 0.8%.
Like last month, most component indexes increased in November. The indexes for apparel (+1.3%), shelter (+0.5%), airline fares (+4.7%), used cars and trucks (+2.5%), and new vehicles (+1.1%) showed sizeable monthly increases in November. The index for major appliances rose by 2.4% in November, after a 0.9% decline in October. Meanwhile, the indexes for motor vehicle insurance, recreation, and communication all declined in November.
The indexes for owners’ equivalent rent (OER) and rent of primary residence (RPR) both increased by 0.4% over the month. Monthly increases in OER and RPR have averaged 0.4% over the last three months.
During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 6.8% in November, following a 6.2% increase in October. The “core” CPI increased by 4.9% over the past twelve months, following a 4.6% increase in October. The food index rose by 6.1% and the energy index rose by 33.3% over the past twelve months.
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).
The Real Rent Index decreased by 0.1% in November, after a decrease of 0.2% in October. Over the first eleven months of 2021, the monthly change of the Real Rent Index was -0.2%, on average.