U.S. CPI Eases in June; Core Prices Rise Minimally
by:Tom Moeller
|in:Economy in Brief
Summary
- Core goods prices slip and decline y/y.
- Service prices edge higher; y/y rise decelerates.
- Energy prices decline while food prices edge higher.
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The Consumer Price Index weakened 0.1% during June after holding steady in May and rising 0.3% in April. A 0.1% rise had been expected in the Action Economics Forecast Survey. The 3.0% y/y gain compared to 3.3% y/y in May and was below the peak 9.1% y/y increase in June of 2022. The three-month increase of 1.1% (AR) was below the 4.6% April high. Prices excluding food & energy edged 0.1% higher last month after rising 0.2% in May and 0.3% April. A 0.2% rise had been expected. Core consumer prices rose 3.3% y/y, the weakest increase since April 2021. It compared to 3.3% rise during all of last year. A decline in pricing momentum was reinforced by a 2.1% three-month rise (AR) in core prices which was below the 4.5% March high.
The CPI less food, energy and shelter, another measure of core pricing power, held steady in both June & May after nine consecutive moderate increases. The 1.8% y/y rise remained below the 7.6% y/y peak in February 2022 and compared to a low of 1.2% y/y in February 2021.
Service costs less energy nudged 0.1% higher in June (5.1% y/y) following a 0.2% May gain and a 0.4% rise in April. Transportation services costs declined 0.5% (+9.4% y/y) for the second consecutive month. The cost of shelter rose 0.2% (5.2% y/y) after four straight monthly increases as owners’ equivalent rent of primary residences increased 0.3% (5.4% y/y), following four 0.4% increases. Rents of primary residences increased 0.3% (5.1% y/y) while the cost of lodging away from home fell 2.0% (-2.3% y/y) after a 0.1% dip. Education & communication prices held steady (+2.3% y/y) following a 0.3% increase. Recreation services prices eased 0.1% (+3.4% y/y) following a 0.2% decline and medical care service costs rose 0.2% (3.3% y/y) after a 0.3% increase.
During June, the CPI for goods less food & energy slipped 0.1% (-1.8% y/y) after holding steady in May. Education & communication goods costs declined 0.5% (-7.7% y/y), down for the third month in the last four. Prices for recreation products rose 0.4% (-1.6% y/y) also after declines in the of the prior four months. Home furnishings prices fell 0.2% (-2.5% y/y) last month after holding steady in May, while appliance costs rose 0.5% (-3.6% y/y) after rising 0.6%. Apparel prices improved 0.1% (0.8% y/y) after weakening 0.3% in May. New vehicle prices eased 0.2% (-0.9% y/y), down for the fifth straight month while used car & truck prices dropped 1.5% (-10.1% y/y) after rising 0.6% in May.
Energy prices declined 2.0% (+1.0% y/y) in June for the second straight month. Gasoline prices fell 3.8% (-2.5% y/y) after falling 3.6%. Amongst other energy products, fuel oil prices fell 2.4% (+0.8% y/y) after weakening 0.4% in May. Electricity prices fell 0.7% (+4.4% y/y) after holding steady, while natural gas prices surged 2.4% (3.7% y/y) after falling 0.8% in May.
Food prices rose 0.2% (2.2% y/y) last month after a 0.1% uptick in May. Egg prices jumped 3.5% (10.2% y/y) after falling in each of the prior two months. Meat, poultry & fish prices slipped 0.1% (+2.1% y/y) after rising 0.3% while cereal & bakery product prices weakened 0.1% (+0.5% y/y) after rising 0.2% in May. Fruit & vegetable prices declined 0.5% both m/m and y/y after holding steady, while dairy prices rose 0.6% (-0.1% y/y) after a 0.5% decline. Nonalcoholic beverage prices rose 0.1% (1.5% y/y) after a 0.3% decline in May.
The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.
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Tom Moeller
AuthorMore in Author Profile »Prior to joining Haver Analytics in 2000, Mr. Moeller worked as the Economist at Chancellor Capital Management from 1985 to 1999. There, he developed comprehensive economic forecasts and interpreted economic data for equity and fixed income portfolio managers. Also at Chancellor, Mr. Moeller worked as an equity analyst and was responsible for researching and rating companies in the economically sensitive automobile and housing industries for investment in Chancellor’s equity portfolio. Prior to joining Chancellor, Mr. Moeller was an Economist at Citibank from 1979 to 1984. He also analyzed pricing behavior in the metals industry for the Council on Wage and Price Stability in Washington, D.C. In 1999, Mr. Moeller received the award for most accurate forecast from the Forecasters' Club of New York. From 1990 to 1992 he was President of the New York Association for Business Economists. Mr. Moeller earned an M.B.A. in Finance from Fordham University, where he graduated in 1987. He holds a Bachelor of Arts in Economics from George Washington University.