NAA Releases July Inflation Tracker
On July 13, the National Apartment Association (NAA) released an inflation tracker that "examines a variety of June data to help industry professionals cut through the noise and stay better informed on our present economic circumstances." You can find the tracker on NAA's website and here's an excerpt:
CPI, Latest Release, June 2021 5.3%
The Consumer Price Index (CPI) rose by 5.3% on a year-over-year basis while prices excluding food and energy (core CPI) rose 4.5%. CPI hit higher levels during the Great Recession, but we have to go back to the 1990/1991 recession to see a level of growth this high for core CPI.
The Federal Reserve is standing by its position that inflation will be transitory and when breaking it down by category, it’s easy to see why. Prices for used cars and trucks were responsible for more than one-third of the all-items increase, up 62% year-over-year. Prices also increased substantially for new vehicles, airline fares and apparel. These are all tied to the reopening of the economy, which while occurring in phases, is a one-time event, a fact which should help alleviate fears of long-lasting inflation.
What to Watch in the Next Month
- Jerome Powell’s Semiannual Monetary Policy Report to Congress takes place on Wednesday, July 14 and inflation is sure to be the focal point of the Fed chairman’s testimony.
- The recent decline in lumber prices should be evident in next month’s PPI data, so look for increases to multifamily construction inputs to ease somewhat.
- The Employment Cost Index (ECI), a quarterly wage growth measure considered to be superior to average hourly earnings by some analysts and economists, will be released on July 30. The ECI is closely watched by the Fed.