Shelter costs continue to be the main factor driving inflation. While the overall Consumer Price Index (CPI) was up 2.9 percent over the last year and the core index was up 2.3 percent, the core excluding shelter rose just 1.4 percent over the last year.

In the month of June, the non-shelter core was up 0.2 percent. Insofar as rising inflation can be viewed as a problem, it is overwhelmingly a story whereby a limited supply of land combined with building restrictions create a shortage of housing. This is largely a West Coast phenomenon, where inflation in the shelter index has been in the 4 to 5 percent range. The rate of increase in rents has been considerably lower in other regions of the country.