The ISM Manufacturing Index which measures the health of the service industry decreased to 47.8%. We are now 16 consecutive months with contractions.

This means the economy is slowing as expected with the continued high FED rate.

The Consumer Price Index has a huge component being Shelter Costs. It makes up 45% of the Core Index. The problem is those numbers incorporate Owners Equivalent Rent (OER) which is 1/3 of the CPI number.

Here is the question and I want you to answer:

“if someone were to rent your home today, how much do you think it would be for rent for monthly, unfurnished and without utilities?”

How could we possibly be tracking Consumer Prices for Shelter if we are asking a question we are guessing at. The difference between the actual rent costs and the OER are diverging.

One of the reasons is the OER peeps are single family home owners not multi family renters. A bit perplexing.

Ok, it’s Friday and I am ranting… Have a fantastic weekend and rates are improving.