Penn State/ACY Alternative Inflation Index shows slight increase in inflation

December 05, 2019

UNIVERSITY PARK — The latest Penn State/ACY Alternative Inflation Index analysis revealed that the inflation rate for October was 2.45 percent. This reflects the first uptick in the ACY inflation rate since July.

The Penn State/ACY Alternative Inflation Index is the result of collaboration among three researchers: Brent Ambrose, Smeal Professor of Risk Management, director of the Institute for Real Estate Studies at Penn State, the director of Smeal’s doctoral program; Jiro Yoshida, associate professor of business at Smeal; and, N. Edward Coulson, professor of economics and director of the Center for Real Estate at the University of California Irvine’s Paul Merage School of Business.

The Bureau of Labor Statistics (BLS) reported that the year-over-year change in the Consumer Price Index (CPI) was 1.77 percent, also up from the previous month’s 1.73 percent.

The primary factor driving the difference in these two measures of inflation rates is the Penn State/ACY Marginal Rent inflation rate. The annual marginal rent inflation rate was 5.49 percent in October, which is slightly higher than September’s rate of 5.14 percent. In contrast, the Bureau of Economic Analysis Personal Consumption Expenditure Rent and BLS Rent declined by 0.1 percent and 0.16 percent, respectively.

The uptick in the ACY CPI inflation rate suggests that the Federal Reserve’s recent interest rate cuts have had the desired effect of stimulating the economy.

(Media Contacts)

Last Updated December 06, 2019