The Biggest Driver Of Inflation Is Getting Less Severe | Global News Avenue

The rising housing costs have fallen to pre-pandemic levels, providing some hope that inflation could slow this year despite soaring costs for food, energy and other essentials.

Wednesday’s report on January Consumer Price Index shows The total price has risen faster than expectedbut there is a silver thread. Rents rose only 0.3%, down from 0.4% the previous month, and equivalent rents for owners, the measure tracks homeowners’ housing costs, up 0.3%, the same as December. Both measures hovered at higher pre-pandemic levels after soaring from late 2021 to 2023.

Housing costs are the largest product in most household budgets and the largest part of inflation measures such as CPI. Therefore, for household budgets and the broader economy, rent increases and decreases are good news.

The overall surge in CPI in January partially reflects the rise in the price of used cars, as well as the increase in the “sanctuary” category, which includes homeowner insurance and hotel prices.

There are still many reasons to be pessimistic about the inflation outlook, including President Donald Trump’s extensive tariffs on foreign trade that could raise prices when implemented. However, lower rental inflation can alleviate some financial pain.

“For the housing CPI, the lower situation from the end of summer seems to be an encouraging story, which may be right,” Ing’s chief international economist James Knightley wrote in a comment. The important counterweight of tariffs. ”