Consumer prices increased 7% in December on a year-over-year (YOY) basis, the largest YOY 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, according to the NAHB.
The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) rose by 0.5% in December on a seasonally adjusted basis, following an increase of 0.8% in November.
During the past twelve months, on a not seasonally adjusted basis, the CPI rose by 7.0% in December, following a 6.8% increase in November. The “core” CPI increased by 5.5% over the past twelve months, following a 4.9% increase in November. It was the largest annual growth since February 1991. The food index rose by 6.3% and the energy index rose by 29.3% 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 0.2% in December, after a decrease of 0.1% in November. Over the twelve months of 2021, the monthly change of the Real Rent Index was -0.2%, on average.
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