PCE Measure of Shelter Slows to 5.3% YoY in June

Here is a graph of the year-over-year change in shelter from the CPI report and housing from the PCE report this morning, both through June 2024.

CPI Shelter was up 5.1% year-over-year in June, down from 5.4% in May, and down from the cycle peak of 8.2% in March 2023.

Housing (PCE) was up 5.3% YoY in June, down from 5.5% in May, and down from the cycle peak of 8.3% in April 2023.

Since asking rents are mostly flat year-over-year, these measures will slowly continue to decline over the next year.

The second graph shows PCE prices, Core PCE prices and Core ex-housing over the last 3 months (annualized):

Key measures are slightly above the Fed's target on a 3-month basis. Note: There appears to be some residual seasonality distorting PCE prices in Q1, especially in January.

3-month annualized change:

PCE Price Index: 1.5%
Core PCE Prices: 2.3%
Core minus Housing: 1.8%