Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through May 2024.
CPI Shelter was up 5.4% year-over-year in May, down from 5.5% in April, and down from the cycle peak of 8.2% in March 2023.
Housing (PCE) was up 5.5% YoY in May, down from 5.6% in April, and down from the cycle peak of 8.3% in April 2023.
Since asking rents are mostly flat year-over-year, these measures will slowly continue to decline over the next year.
The second graph shows PCE prices, Core PCE prices and Core ex-housing over the last 3 months (annualized):
Key measures are slightly above the Fed’s target on a 3-month basis. Note: There appears to be some residual seasonality distorting PCE prices in Q1, especially in January.
PCE Price Index: 2.4% (3 month annualized)
Core PCE Prices: 2.7%
Core minus Housing: 2.2%