Inflation is cooling, but shelter makes up the lion’s share.
Headline inflation fell by more than expected last month. In October, prices rose by 7.7% on the year in the U.S. and increased by 0.4% on the month, according to the Consumer Price Index released Thursday.
That news that the Federal Reserve’s series of interest-rate hikes appear to be having an effect on inflation was welcomed on Wall Street, as the Dow Jones Industrial Index
surged in early trading.
However, others have less reason to cheer. Shelter costs — the biggest services’ component in the CPI that accounts for one-third of the overall index — rose 6.9% on the year and 0.8% on the month, the largest monthly rise since 1990.
“Shelter costs — the biggest services’ component in the CPI that account for roughly one-third of the overall index — rose 6.9% on the year and 0.8% on the month, the largest monthly rise since 1990.”
Recent homeowners are feeling the heat as their housing expenses have risen, and they are cutting back on eating out, entertainment, wellness, and health and beauty, according to a separate report by Numerator, a market-research firm.
Buying a house triggered a big shift in people’s financial behavior. Some 74% of recent homeowners said that housing expenses have increased over the last year along with inflation and the Fed’s interest-rate hikes, the report said.
They are experiencing an increase in utilities, property taxes, home maintenance, homeowners association fees, mortgage interest and insurance premiums. This is prompting 85% of recent homeowners to cut costs, it added.
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