Consumer Price Index: Modest 0.2% Inflation in June, Below Expectations

Highlights

• Headline inflation rose by just 0.2% in June, lower than expected.
• Core inflation misses forecast with 0.2% reading in June.
• Shelter and motor vehicle insurance were major contributors to the increase.
• Mixed results across sectors, highlighting a complex economic landscape.

CPI Up 0.2% versus 0.3% Forecast

The latest report from the U.S. Bureau of Labor Statistics reveals that the Consumer Price Index for All Urban Consumers experienced a 0.2 percent rise in June on a seasonally adjusted basis. This follows a 0.1 percent increase in May, indicating a modest upward trend. The headline monthly consumer price index estimate was 0.3 percent. Looking back over the past year, the all items index has increased by 3.0 percent before seasonal adjustment, with the annual consumer price index estimate coming in at 3.1 percent.

The primary driver behind the overall increase in the all items index was the index for shelter, which accounted for over 70 percent of the rise. Additionally, motor vehicle insurance played a contributing role. In terms of food, the index recorded a 0.1 percent increase in June, following a 0.2 percent increase in the previous month. While the index for food at home remained unchanged, the index for food away from home saw a 0.4 percent rise. The energy index witnessed a 0.6 percent increase, although there were mixed results among its major components.

Core CPI Up 0.2% versus 0.3% Estimate

Breaking down the data further, the index for all items less food and energy experienced a 0.2 percent rise in June, marking the smallest monthly increase since August 2021. Notable increases were observed in the indexes for shelter, motor vehicle insurance, apparel, recreation, and personal care. On the other hand, certain indexes, such as airline fares, communication, used cars and trucks, and household furnishings and operations, saw a decrease over the month.

Over the past 12 months ending in June, the all items index grew by 3.0 percent, representing the smallest increase since March 2021. Meanwhile, the all items less food and energy index rose by 4.8 percent over the same period. The energy index, however, witnessed a significant decrease of 16.7 percent for the 12 months ending in June. Conversely, the food index showed a 5.7 percent increase over the past year.