Who exactly is a “super user”? Getty Images
The U.S. Bureau of Labor Statistics does not maintain a list of “superusers” and said an email it sent to the group last week about a key measure of rent inflation was a “mistake.”
“Officials were responding to multiple inquiries seeking information regarding rental CPI and OER,” BLS Associate Commissioner Jeffrey Hill said in a Thursday webinar. He cited owner-equivalent rents, which were a big factor in January's strong CPI numbers.
“In order to speed up the response, employees blind-copied a large number of requesters and called them super users. This was a mistake,” Hill said, adding that the webinar will be posted on the BLS website and YouTube as soon as possible. It added that it will be posted on the channel.
The BLS said the email, sent on February 27, confirmed that the jump in OER at the beginning of the year — the largest since April 2023 and that puzzled analysts — was due to a change in the underlying calculation. After making suggestions, we decided to hold a webinar. , not just a price increase. One recipient said the BLS tried to retract it and told them to ignore its contents.
Later that week, the BLS attempted to quell the confusion with a notice on its website, disclosing information that has typically been kept secret: the change in the weight of single-family homes within OER compared to multifamily housing. But economists were still not satisfied.
BLS Deputy Commissioner Rob Cage said in a phone call that the email “suggests that the second component unit-level weight assigned to each unit is primarily responsible” for OER's progress. . “This is part of the story, but not the complete story.” Play video
Failed adjustment
Mr. Cage went on to explain the highly technical details of how rents are calculated and the adjustments that the BLS makes, but that the adjustments will fail because the BLS sample is not completely representative of the housing market. There are many. This sample underrepresents single-family homes, where most homeowners live, compared to apartments.
He said it is not clear what the OER metric will be by the end of the year given this change. “You can expect some volatility,” Cage said.
Ed Al Hussaini, interest rate strategist at Columbia Threadneedle Investments, said it was “quite unusual” for regulators to provide details of a methodology that had not previously been made public, and that such information is important to the Fed. He said that it has a meaning.
“This speaks to how important this year's changes in methodology and weightings are for policymakers and market participants,” Al Hussaini said. “Sustained housing inflation is likely to play a key role in initiating and accelerating the Fed's interest rate normalization strategy this year.”