PCE Measure of Shelter Slows to 6.4% YoY in December

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 December 2023.

CPI Shelter was up 6.2% year-over-year in December, down from 6.5% in November, and down from the cycle peak of 8.2% in March 2023.

Housing (PCE) was up 6.4% YoY in December, down from 6.7% in November, and down from the cycle peak of 8.3% in April 2023.

Since asking rents are mostly flat year-over-year, these measures will continue to slow over coming months.

The second graph shows PCE prices, Core PCE prices and Core ex-housing over the last 6 months (annualized):

Key measures are now at or below the Fed's target on a 6-month basis.

PCE Price Index: 2.0%
Core PCE Prices: 1.9%
Core minus Housing: 1.1%