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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: John McCarthy who wrote (93641)	2/1/2009 1:40:44 PM
From: SouthFloridaGuy	Respond to of 116555

Both, kind of. Officially slowing yes. Unofficially declining...read on... nytimes.com

To: John McCarthy who wrote (93641)	2/1/2009 8:27:06 PM
From: Sr K	Read Replies (2) \| Respond to of 116555

>>dumb this down for me? ... Currently it appears Owners Equivalent Rent inflation is slowing << The CPI does not include rent; it has Owners Equivalent Rent (OER) as a monthly measure of occupancy cost (OC), to smooth fluctuations in OC, which includes the cost to buy a home but other related costs. If DOL didn't smooth it in some manner, the housing cost component would be ~zero for 49 months and then a big number and zero for 119 months and then a big number (for buying a new home every 5 or 10 years), and a big negative number if and when you sold your house at a "profit" and downsized, with actual rent for the other months-- MOL. That would make the CPI-U impractical to use for the many non-housing purposes for which it is used. Owners Equivalent Rent inflation is a derivative of Owners Equivalent Rent, and probably was not what LG meant to refer to. But the derivative, Owners Equivalent Rent inflation, was declining before house prices started to decline. OER does not refer to the cost to rent.