June CPI Relatively Tame

One month does not make a trend, but the CPI numbers were relatively tame for June. The article can be found at Market Watch and the original government press release can be found at the BLS.

U.S. consumer prices increased a moderate 0.2% in June, with falling energy prices offsetting rising food prices, the Labor Department said Wednesday. It's the smallest increase in the seasonally adjusted consumer price index since January.

Excluding volatile food and energy prices, the core consumer price index also increased 0.2%, the government said. Consumer prices are up 2.7% in the past 12 months; core inflation is up 2.2%. In May, the CPI rose 0.7% while the core CPI was up just 0.1%.

Energy prices fell 0.5% in June after surging the previous three months at an annual rate of more than 70%. In June, gasoline prices fell 1.1% and natural gas prices fell 0.1%. Gasoline prices have inched higher in recent weeks, however.

Food prices are up at an annual rate of 5.1% in the past three months, driven higher by adverse weather, strong global demand and the diversion of much of the corn crop and the nation's arable land into the production of ethanol for fuel.

Outside of food prices, inflation was generally tame in June. Medical care prices rose 0.2%, housing prices rose 0.3% and apparel prices fell 0.6%.

The Fed monitors a different, but related inflation measure produced by the Commerce Department, known as the personal consumption expenditure price index, which will be released at the end of the month. The core PCE price index has risen 1.9% in the past year, just inside the Fed's unofficial comfort zone of 1% to 2%.