OER you kidding me?


OER is the core of the bullish equity market trade. It is the primary measure of housing inflation in the US CPI. This measure shocked most in last week’s strong CPI because OER normally tracks much weaker and more timely private indexes. Goldman has more.

We expected and indeed received a large “January effect” in last week’s price data, with CPI and PPI both surprising consensus to the upside.

In our view, the bigger surprise was the 0.56% spike in owners’ equivalent rents (OER), which outperformed the primary rent measure by the most since 1995.

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About the author
David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.