Twin Cities Inflation Cools as Housing Costs Rise More Slowly

Inflation is slowing nationwide and the Twin Cities area has seen lower price increases than the national average. The local Consumer Price Index rose just 2.2% in September, compared to 3.7% nationally.

Housing costs are a major driver of inflation. Shelter prices make up over half the national CPI increase. Without housing, inflation would be around 2%.

The Twin Cities region has had lower inflation partly due to population growth and a boom in apartment construction putting less pressure on housing costs.

Inflation is still too high, so the value of the dollar is weakened. Consumers feel poorer as inflation-adjusted earnings decline.

The Federal Reserve may raise interest rates again soon to slow spending and bring down inflation, though there is disagreement on whether another hike is needed.