Inflation may ease a tad next January.
No, we're not economic whiz kids; Uncle Sam is changing the way his elves calculate home ownership costs. Currently, these costs make up about 26 percent of the consumer price index and include increases in the asset value of a home. This tends to overstate the cost of ownership. So the feds have been keeping tabs on rents paid by tenants in houses similar to those owned by their occupants. They'll use this to adjust the ownership component. After the change in January, home ownership will only account for about 15 percent of the CPI.
The impact? July's annualized inflation rate was 6.5 percent. Using the new formula, it would have been 6.4 percent.m