Consumer Price Index for Shelter Rising in the Portland-Salem MSA

The Consumer Price Index (CPI) for All Urban Consumers in the Portland-Salem area grew 2.6 percent from the second half of 2015 to the second half of 2016, much faster than the U.S. prices increase of 1.5 percent.

Recent focus on housing cost increases in the Portland area is reflected in the Consumer Price Index’s shelter measure. The cost of shelter increased more (6.8%) in the Portland-Salem area than the U.S. city average (3.5%). Shelter is about one-third of the CPI - All Items index and has a large influence on overall consumer prices, so rising housing prices helped push Portland's CPI above the U.S.

Shelter includes rent of primary residence, lodging away from home, and owner’s equivalent rent of primary residence. According to the Bureau of Labor Statistics, rental equivalence measures the change in the implicit rent, which is the amount a homeowner would pay to rent or would earn from renting.

In contrast, the Portland-Salem area had little change in prices for food. In fact, food prices fell 0.3 percent over-the-year from the second half of 2015 to the second half of 2016. The U.S. city average price for food also showed a moderate decline of 0.2 percent from the second half of 2015 to the second half of 2016.

While still showing an over the year decline, the price of gasoline increased drastically during the second half of 2016. The U.S. saw a 7.1 percent increase in the price of gasoline from the first to the second half of the year, while the price of gasoline increased 10.5 percent in the Portland-Salem area.

Blog article written by State Employment Economist Nick Beleiciks.