When housing and rents jump 20-30% consumers see these advertised prices immediately and start factoring them into their future budgets. The average renter will have to pay these prices in 6 months (when their lease is up). But the prices won't be reflected in the CPI for another 16 months.
CPI: Shelter measures rents people are currently paying, not new rental prices. New rental prices aren't fully appreciated for 12 months. So the CPI: Shelter figure lags by a year plus a quarter (for data collection).
The reasons for the lag are solid. But it adds to the reasons CPI is an aweful indicator of consumer inflation expectations and effects on personal budgets.
CPI: Shelter measures rents people are currently paying, not new rental prices. New rental prices aren't fully appreciated for 12 months. So the CPI: Shelter figure lags by a year plus a quarter (for data collection).
The reasons for the lag are solid. But it adds to the reasons CPI is an aweful indicator of consumer inflation expectations and effects on personal budgets.