Researchers at the US Bureau of Labor Statistics and the Federal Reserve Bank of Cleveland have been in search of a better understanding of inflation. Their inquiry into the rate of change of residential rents suggests that government calculations of inflation, in which shelter is 32% of CPI, may be significantly off. They suggest a new approach that might better balance costs of renewals with rents for new tenancies with the launch of a new index that captures only the leases of tenants that have recently moved.

According to researchers Brian Adams, Lara Loewenstein, Hugh Montag, and Randal Verbrugge, this has become a particularly thorny problem in measuring shelter costs. Available indexes vary wildly. As they point out in their paper, in the first quarter of 2022, “the Zillow Observed Rent Index (ZORI) and the marginal rent index (ACY MRI) reached an annualized 15 percent and 12 percent, respectively, while the official CPI for rent read 5.5 percent.”


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Erik Sherman



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