Inflation and Rent Trends in September 2024

The latest reports indicate that while inflation is easing, core inflation—which excludes volatile food and energy prices—rose to 3.3% annually, driven by higher costs in medical care, clothing, auto insurance, and airline fares. Rent prices have also started to cool, with a monthly increase of just 0.3%, down from higher rates earlier in the year. This trend suggests that housing inflation, which has been a significant contributor to overall price increases, may be stabilizing. The Federal Reserve is expected to respond to these inflation trends by continuing to lower interest rates in a measured approach, aiming to support economic growth while keeping inflation in check.

Key Trends in Inflation and Rent

• Overall Inflation: Consumer prices increased by 2.4% in September, the smallest annual rise since February 2021. This marks the sixth consecutive month of decline in inflation rates.

• Core Inflation: Core inflation rose slightly to 3.3%, influenced by rising costs in various sectors, including auto insurance and airline fares. This measure is closely monitored by the Federal Reserve as it reflects underlying price trends more accurately than overall inflation.

• Rent Trends: Rent increases have slowed, with a monthly rise of 0.3%. This is promising news for consumers, as housing costs have historically been a major driver of inflation.

• Gas Prices: A significant factor in the overall inflation slowdown was a 4.1% drop in gasoline prices, which have been declining for several months due to factors like increased U.S. oil production and slowing global demand.

• Future Outlook: Economists predict that inflation will continue to trend toward the Federal Reserve’s target of 2%, provided that the labor market remains stable and there are no significant disruptions in global markets. This could lead to further interest rate cuts by the Fed in the upcoming months.