This post is just a short update on the CPI, as a follow-up to a post last month.  The Bureau of Labor Statistics issued today its regular monthly update on the CPI, with figures through September.  As discussed in earlier posts on this blog, I find the six-month moving average for the change in the CPI (annualized) as the most interesting presentation of the data as it picks up changes in the trends well while not being subject to the volatility of changes over shorter periods.

For the six-month period ending in September, the annualized rate of change in the overall CPI is now just 1.6% – or well less than the 2% target many often refer to.  The CPI for everything-but-shelter is now growing at an essentially zero rate (0.1% to be more precise).  And the rate of change in the shelter component of the CPI continues to fall, growing at an annual rate of 4.2% over the past six months – the lowest since the six months ending in July 2021 (when the country began to emerge from the Covid crisis).  This is close to what it has been in the past decade, other than in 2020 when the price index for shelter collapsed (along with much else) due to the Covid crisis, and then the rise from 2021 to recently.  Between 2014 and 2019, the shelter component of the CPI consistently rose at a rate of between 3 and 4% (annualized).

The inflation rate has definitely come down to a level that can be considered normal.