Like an uninvited drunken uncle, higher consumer inflation crashed the economy's growth party Wednesday. But it wasn't just higher energy prices that caused concern.A problem in areas where they restrict apartment buildings.
Rising rents and higher prices for a wide variety of consumer goods, including prescription drugs, swimsuits and school books, were key factors behind a higher-than-expected 0.6% increase in consumer prices in April.
The inflation news, reported by the Labor Department, sparked a stock market sell-off amid fears that it would lead to higher interest rates and an economic slowdown.
Higher rents in particular were worrisome, accounting for nearly half the surprisingly high 0.3% increase in the core consumer price index, which excludes energy and food costs. Rents have been increasing as many people are priced out of the sky-high home purchase market.
Thursday, May 18, 2006
Rents a Key Driver of Inflation
The L.A. Times reports: