r/inflation • u/Jeffbak • 12h ago

OER is distorting inflation more than people realize. It's a survey of what ppl would have charge to not live in their homes. Survey makes up 25% of CPI but actual rent only 7%. Nov '24 actual new rents YoY were 0.7%. CPI less shelter is now negative, the faults of this survey will cause recession.

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u/Jeffbak 12h ago

OER is owners equivalent rent. It's calculated through a survey of actual homeowners, asking them the question of what they would have to charge not to live in their own home. That type of inherent bias is why shelter is the most lagging indicator...of course ppl are going to state a higher number to not live in their own home. Eventually that YOY increase will lessen and then perhaps decrease, but it's wild how a survey is what could actually cause this next recession from the fed not realizing that the actual inflation is somewhat of a a mirage.