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Inflation cools, but housing costs and wages still pressure consumers
July CPI rose 3.4% year over year, while core CPI increased 2.5% and real average hourly earnings fell 0.1%.
ConnectCRE highlighted July inflation data showing a slowdown in price pressures, but warned consumers are not fully out of the woods. The Consumer Price Index increased 3.4% year over year, while core CPI, which excludes food and energy, rose 2.5%. Both measures dipped slightly month over month and aligned with market expectations. Housing remains a key driver of core inflation, with Owners' Equivalent Rent accounting for much of the increase. Apartment rents rose 1.3%, down from a 2.1% increase a year earlier, but broader household purchasing power is still showing stress, as real average hourly earnings declined 0.1%. ConnectCRE also pointed to continued upward pressure in parts of everyday spending. Food prices increased in July, with grocery and restaurant prices rising 2.7% and 3.4% year over year, respectively. A Marcus & Millichap view cited by ConnectCRE said the mix could reflect ongoing discretionary dining interest, but also signals vulnerability if purchasing power weakens further.
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