South By North Strategies, Ltd.

From the U.S. Bureau of Labor Statistics’ report on changes in the consumer price index in December 2009:

On a seasonally adjusted basis, the December Consumer Price Index for All Urban Consumers (CPI-U) rose 0.1 percent, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the index increased 2.7 percent before seasonal adjustment.
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The seasonally adjusted increase in the all items index was broad based, with the indexes for food, energy, and all items less food and energy all posting modest increases. Within the latter group, a sharp rise in the index for used cars and trucks was the largest contributor to the 0.1 percent increase, while the indexes for airline fares, apparel, and lodging away from home rose as well. In contrast, the indexes for rent and owners’ equivalent rent were unchanged and the index for new vehicles declined.

In an analysis of the data, economist David Rosnick of the Center for Economic and Policy Research observes that low levels of consumer price inflation in recent months are attributable to the fallout from the housing bubble. Writes Rosnick:

After three months of decline, the price indices for rent and owner’s equivalent rent each remained flat in December.  The oversupply of housing resulting from the housing bubble mean these components have been a significant source of price restraint overall.  The non-rent core CPI grew at an annualized rate of 2.5 percent over the last six months compared to 1.3 percent in the overall core.
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The fall in rents has been particularly pronounced in the South.  In Washington, DC, where real house prices have fallen more than 34 percent since the peak in early 2006, (non-seasonally-adjusted) rents have fallen at a 1.2 percent rate since September.  In Miami, rents are falling at a 2.6 percent annualized rate, having seen a 50 percent fall in real house prices.  Atlanta, where the housing bubble was less pronounced (having fallen 24 percent in two years), has seen rent fall at a 4.7 percent rate over the last three months.