Consumer Prices Jump For Sixth Straight Month

If falling gas prices were putting any extra money in American pockets, inflation spurring from rising housing costs is cutting deep into it.

For sixth months straight, the consumer price index that measures what Americans pay for everything ranging from food to utilities rose by 0.1 percent from a month earlier, according to the Labor Department. If energy and volatile food categories were to be excluded, the index observed a solid 1.8 percent growth from a year before.

The increase observed in the “core index” contributes to the continuous increase in rent and mortgage. In July this year, the prices for shelter, which is the largest component of the consumer price index at a third of overall measurements, were reportedly soaring at the highest levels observed since early 2008 at 3.1 percent.

“The rise in rent reflects the shortage of multi-family homes,” Steve Blitz, economist at ITG Investment Research, told The Wall Street Journal. Increased housing costs are cutting into consumers’ disposable incomes, he added.

Amidst plummeting oil prices and rocketing shelter costs, consumer spending is also taking a beating from poor wage raises, the Labor Department discovered on one of its other indexes, WSJ reported.

However, data from the Labor Department’s report does reflect a downfall in prices for fuel-related businesses, like airline fares, which decreased by 5.6 percent in a month. It’s the largest decrease in airfares observed since Dec. 1995, the report noted. Meanwhile, the fuel index obviously saw the largest decline among all other commodities with a 29.7 percent fall in prices observed, according to the report.

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