Inflation Research Brief

September 25, 2023

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Core Inflation Continues to Cool: Implications for
Housing, Industrial and Retail Space

Core pricing pressures subside further. The headline consumer price index rose 3.7 percent year-over-year in August, the second month in a row that the metric ticked up. While this could suggest a re-acceleration of price hikes, the cyclical nature of the increase suggests that inflation is still broadly slowing. Over one-half of the rise was due to a 10.6 percent annual jump in gasoline costs, an index that is subject to volatile external forces like natural disasters and global conflict. Core CPI, which omits volatile energy and food costs, decelerated to a two-year low of 4.3 percent in August. A smaller rise in the cost of shelter is reducing core inflationary pressures, and should help place headline inflation on a downward path again once energy prices re-stabilize.

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