Inflation Watch: June 2011

529 views

Published on

In the Inflation Watch series, NAR Research focuses on the price level. We monitor measures of inflation that affect the business of REALTORS® and summarize their impact, highlighting areas of potential concern.

Published in: Real Estate
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
529
On SlideShare
0
From Embeds
0
Number of Embeds
28
Actions
Shares
0
Downloads
3
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Inflation Watch: June 2011

  1. 1. June 2011 Inflation Watch An Eye on Prices June 17, 2011 Next Release: July 15, 2011
  2. 2. Inflation Watch <ul><li>Inflation (price-level growth) is important for REALTORS® because it can lead to shifts in interest rate policy by the Federal Open Market Committee (FOMC). </li></ul><ul><li>Generally, the FOMC lowers interest rates to stimulate the economy. However, rates that are too low may lead to inflation. To combat inflation, the central bank increases interest rates but this policy may dampen economic growth. </li></ul><ul><li>For example, lower mortgage rates could bring home buyers into the market and create jobs while higher mortgage rates caused by inflation or central bank action could reduce demand among home buyers. </li></ul>
  3. 3. Inflation Watch <ul><li>During the recent financial crisis, fears of deflation (price-level decline) were rampant. (Deflation caused a downward spiral of prices that destroyed the economy in the Great Depression.) </li></ul><ul><li>With financial markets now stable, some fear that inflation is around the corner. Stagflation, another unpleasant economic condition characterized by high unemployment and high inflation, is also a possibility. </li></ul><ul><li>In stagflation, it is difficult for the central bank to raise interest rates to combat inflation due fear of further job market deterioration if demand is hurt by the increased interest rates. </li></ul>
  4. 4. June 2011 Highlights <ul><li>Monthly price change from May to June was generally better, but increases that occurred in previous months have kept year over year inflation high. </li></ul><ul><li>Increases in producer prices continue to spill into consumer prices; if the monthly decline in energy prices persists, this could reduce price pressure </li></ul><ul><li>Headline consumer price growth was generally slower in June, but necessities such as education, hospital costs, and food at home are areas of concern; the price of lodging away from home also grew at a rate higher than usual this month </li></ul>
  5. 7. PCUSLFE <ul><li>CPI-U: All Items Less Food and Energy </li></ul><ul><li>% Change - Year to Year SA, 1982-84=100 </li></ul><ul><li>CPI-U: All Items </li></ul><ul><li>% Change - Year to Year SA, 1982-84=100 </li></ul><ul><li>PCUSLFE.EMF (USECON) PCUSLFE / PCU 10603-11102 </li></ul>
  6. 8. PCUHSHO <ul><li>CPI-U: Owners' Equivalent Rent/Primary Residence </li></ul><ul><li>% Change - Year to Year SA, Dec-82=100 </li></ul><ul><li>PCUHSHO.EMF (USECON) PCUHSHO 10103-11102 </li></ul>
  7. 9. SP3000 <ul><li>PPI: Finished Goods </li></ul><ul><li>% Change - Year to Year SA, 1982=100 </li></ul><ul><li>PPI: Finished Goods less Food and Energy </li></ul><ul><li>% Change - Year to Year SA, 1982=100 </li></ul><ul><li>SP3000.EMF (USECON) SP3000 / SP3500 10603-11102 </li></ul>
  8. 10. PZGOL <ul><li>Cash Price: Gold Bullion, London Commodity Price, PM Fix </li></ul><ul><li>US$/troy Oz </li></ul><ul><li>PZGOL.EMF (USECON) PZGOL 10603-11102 </li></ul>
  9. 11. PZTEX <ul><li>Domestic Spot Oil Price: West Texas Intermediate </li></ul><ul><li>% Change - Year to Year $/Barrel </li></ul><ul><li>PZTEX.EMF (USECON) PZTEX 10103-11102 </li></ul>
  10. 12. PMEA <ul><li>Import Price Index: All Imports </li></ul><ul><li>NSA, 2000=100 </li></ul><ul><li>PMEA.EMF (USECON) PMEA 10004-11103 </li></ul>
  11. 13. CCIHF <ul><li>Houses under Construction: Fixed-Weighted Price Index </li></ul><ul><li>NSA, 2005=100 </li></ul><ul><li>NAR Median Sales Price: Total Existing Homes, United States </li></ul><ul><li>$ </li></ul><ul><li>CCIHF.EMF (USECON) CCIHF / USMNBDP 10102-11101 </li></ul>

×