Inflation, as measured by the personal consumption expenditure index, the Fed's preferred measure, was just 0.9% for the year ending 6/16, and core inflation (which removes food and energy) was 1.6%, both below the Fed's 2% target. However, goods inflation was -1.8%, while services inflation, which faces little overseas competition, was 2.2%. Since services account for 80% of GDP and employment, inflation may well rise even if goods get cheaper.
Last week, we learned that the seasonally-adjusted homeownership rate declined to 63.1%, the lowest level since 1965, yes 1965, and a steep fall from the peak of 69.4% in 04Q2. Since the start of the recession in 01/08, there's been no meaningful change in the number of owner-occupied houses. By contrast, there's been a 21% rise in renter-occupied units. The homeownership rate is at or near bottom. Hello Gen-Y!