After a .5% rise in headline CPI in May, it fell by .4% in June which was more than the anticipated drop of one tenth. The core rate too was under the estimate with no m/o/m change vs the estimate of up .2%. Versus last year, prices rose 3.5% headline and 2.6% core vs 4.2% and 2.9% respectively in May. CPI ex food, energy and shelter fell by one tenth m/o/m but up 2.1% y/o/y. As housing is the largest expense for most people, I’m not a fan of this level of parsing.
After the large run higher in the prior months, energy prices fell back by 5.7% in the month, though still up 15.7% y/o/y with gasoline prices in particular up by 27% y/o/y. Food prices grew by .2% m/o/m and 3% y/o/y. ‘Food at home’ prices were up by .2% m/o/m and 2.7% y/o/y. ‘Food away from home’ saw prices up .2% m/o/m and 3.4% y/o/y.
Keeping a lid on the core rate was no change in services inflation ex energy m/o/m, though still up 3.2% y/o/y. Owners Equivalent Rent cooled a touch to a .2% rise m/o/m and by 3.3% y/o/y. ‘Rent of Primary Residence’ was up .1% m/o/m and 2.8% y/o/y, getting closer to reality. Medical care costs fell one tenth m/o/m and up just 2% y/o/y which is not close to the reality on the ground, particularly with health insurance. Explain this to me, health insurance costs fell 7.4% y/o/y and by .5% m/o/m. It’s because the BLS is measuring profit margins of health insurers rather than what policies are actually being priced at. Airline fares were little changed, up by .2% m/o/m, but after a big jump in the prior months. They are up 26.5% y/o/y. It’s still expensive to fix a car with ‘maintenance’ prices up by 1.1% in the month and by 7% y/o/y. Auto insurance prices fell 2% m/o/m and 4.1% y/o/y, finally getting some price help here.
