Needless to say, the BLS didn’t do itself any favors in the credibility department with Thursday’s US CPI report, which suggested inflation in America collapsed over the past two months.

In the besieged bureau’s defense, I’m not sure what choice(s) they had. To the extent there were options, none of them were good.

But in places, they seem to have made the worst possible choice from a menu of bad alternatives. Nowhere was this more apparent than in the key shelter metrics, OER and rent of primary residence.

What follows is more a collection of observations and quotes than a comprehensive account. It should be read as such, not as an effort to explain, definitively, what happened and what it’ll mean going forward.

The figure below gives you some context for the implied monthly rates on the above-mentioned housing indexes — 0.1351% for OER and 0.0631% for the rent measure. Those are derived from dividing the two-month change by two.

You don’t need statistics to understand why that raised eyebrows — all you need is eyes — and once you read up on the methodology, you come away with the conclusion that the BLS simply assumed no housing inflation in October at all.

“[The] major issue was zeroing out rent/OER in October,” sell-side veteran Omair Sharif, who now runs an inflation-focused specialty research shop remarked. “Assuming no adjustments, that will artificially lower YoY rates until April.”

Recall that the BLS’s rent-sampling process entails polling a rotating panel of tenant households at six-month intervals. Here’s the key passage from the official explainer:

The CPI program collects rent data from each sampled unit every six months. Many rents change infrequently, being locked in place for a given lease term, and collecting rent data less frequently allows for a larger sample. Most rents included in the sample are continuing rents, and only a minority of observations are rents which have changed since the previous observation period. The CPI program divides each area’s rent sample into six subsamples called panels. The rents for panel 1 are collected in January and July; panel 2, in February and August, etc.

Panel 4, then, would appear to be the relevant subsample.

In a statement to the mainstream financial press, a spokesperson for the BLS said the housing prints were a product of “carry-forward imputation,” which in this case meant, among other things, using rents for April for the October calculation.

“Rents for October 2025 were carried forward from April 2025, yielding unchanged index values for rent and owners’ equivalent rent for October,” the bureau said.

Sharif went on to point out another, more obvious, issue with the release. “[W]eaker prints for a lot of core goods ex-autos [were] due to price collection only in the second half of November” when there are “more discounts and sales,” he said.

“[I]nvestors were justified in being skeptical of the accuracy of the BLS update,” BMO’s Ian Lyngen wrote. “The BLS assumed a very low print” for October’s shelter measures, making it appear as though housing “downshifted so dramatically that investors are questioning the BLS’s methodology for the October series — very low changes as placeholders?”

From a big picture perspective, this is yet another manifestation of acute government dysfunction in America, and it underscores the rolling institutional credibility crisis I’ve been on about for years. You shut down the government for a month and a half, and this is what you get. Chaos and confusion.

“The next few months will be an important litmus test for the ability of the BLS to restore confidence,” Lyngen said, in the same Thursday evening note. “If nothing else, the private data and Fed series will continue to increase in relevance.”

At least one person was prepared to offer a ringing endorsement of this obviously meaningless data.  “[It’s] an absolute blockbuster,” erstwhile Fed Chair frontrunner Kevin Hassett told Fox News.”This is just an astonishingly good CPI report.”

It was indeed “astonishing.” Kevin got that much right.