U.S. CPI Eases in June; Core Prices Rise Minimally

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.