Inflation continues to moderate, September cut is a lock I believe/Claims data, holiday influenced

June CPI unexpectedly fell one tenth headline vs the estimate of up one tenth. The core rate was higher by one tenth vs the estimate of up two tenths. Versus last June, headline CPI is up 3% and the core rate by 3.3% vs 3.3% and 3.4% respectively in May. A 2% drop in energy prices m/o/m for a 2^nd month was the main driver of the headline decline. Food prices grew by .2% m/o/m and 2.2% y/o/y. Specifically, Food at Home prices rose .1% m/o/m and 1.1% y/o/y, still growing slower than Food Away from Home where prices jumped .4% m/o/m and 4.1% y/o/y.

Services inflation ex energy also slowed to a one tenth gain m/o/m, though still up 5% y/o/y. On the rental side, both OER and Rent of Primary Residence each rose .3% m/o/m after many months of .4% increases. The y/o/y gains are 5.4% and 5.1% for each. While real world rents are growing slower than this, rents in CPI never rose as much as they did in the real world a few years ago. Medical care costs rose .2% m/o/m after a .5% print in the month before and are up 3.3% y/o/y. Healthcare insurance prices rose .1% m/o/m after a .5% rise in May. Higher insurance prices remain a problem as we saw a .9% rise in vehicle insurance m/o/m and is up 19.5% y/o/y. Fixing a car saw prices up .2% m/o/m and 6% y/o/y. On the travel side prices are falling, and following what Delta said, airline fares fell 5% in the month alone and are down 5.1% y/o/y. Hotel prices fell 2.5% m/o/m and by 2.8% y/o/y.