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Economics

Inflation & Price Pressures Report: Scarce Housing is Propping Up Inflation

April 2024

Report summary

Despite substantial cooling in prices for certain categories, topline inflation—which remains above the Federal Reserve’s 2% target—increasingly looks to be moving sideways rather than down. The stickiest components of the consumer price index—housing and other services—continue to prop up price growth, while a surge in energy prices in recent months is offsetting softer durable goods prices. Consumers are slowly acclimating to elevated price levels, but certain groups are showing softer demand as budgets strain.

Key Takeaways

  • Inflation’s stickiest components—housing and other services—continue to see strong price growth, propping up inflation even as certain goods prices cool.
  • Consumers’ price sensitivity and willingness to trade down have come down from a year ago, however certain groups—including lower earning households—continue to struggle with elevated pressures.
  • Supply dynamics vary by category, with persistent scarcity impacting home purchases while growing durable goods inventories lead to falling prices.

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About the authors

A headshot photograph of Kayla Bruun
Kayla Bruun
Lead Economist

Kayla Bruun is the lead economist at decision intelligence company Morning Consult, where she works on descriptive and predictive analysis that leverages Morning Consult’s proprietary high-frequency economic data. Prior to joining Morning Consult, Kayla was a key member of the corporate strategy team at telecommunications company SES, where she produced market intelligence and industry analysis of mobility markets.

Kayla also served as an economist at IHS Markit, where she covered global services industries, provided price forecasts, produced written analyses and served as a subject-matter expert on client-facing consulting projects. Kayla earned a bachelor’s degree in economics from Emory University and an MBA with a certificate in nonmarket strategy from Georgetown University’s McDonough School of Business. For speaking opportunities and booking requests, please email [email protected]

A headshot photograph of Sofia Baig
Sofia Baig
Economist

Sofia Baig is an economist at decision intelligence company Morning Consult, where she works on descriptive and predictive analysis that leverages Morning Consult’s proprietary high-frequency data. Previously, she worked for the Federal Reserve Board as a quantitative analyst, focusing on topics related to monetary policy and bank stress testing. She received a bachelor’s degree in economics from Pomona College and a master’s degree in mathematics and statistics from Georgetown University.

Follow her on Twitter @_SofiaBaig_For speaking opportunities and booking requests, please email [email protected]