Journal Article

Comparing Measures of Rental Prices Can Inform Monetary Policy

Abstract: Shelter makes up one-third of the Consumer Price Index (CPI) and is important to understanding inflation developments. Comparing two measures of shelter prices—the official U.S. Bureau of Labor Statistics (BLS) dataset and the Zillow rental price index—shows that the Zillow series leads the BLS series by about six to 10 months. Changes in the Zillow series should eventually be reflected in the BLS data, so any positive gap between the two suggests that tighter monetary conditions may be needed to lower CPI inflation.

Keywords: housing; monetary policy; rental prices; housing market;

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Bibliographic Information

Provider: Federal Reserve Bank of Kansas City

Part of Series: Economic Bulletin

Publication Date: 2023-09-29

Pages: 4