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Economy in Brief

U.S. CPI Again Weaker than Expected in June
by Sandy Batten  July 14, 2017

The Consumer Price Index continued to underperform market expectations in June. The headline index was unchanged from May (+1.6% y/y) against a market expectation (from the Action Economics Forecast Survey) of a 0.1% m/m increase. This index had unexpectedly slipped 0.1% m/m in May. The core index (that excludes food and energy prices) edged up 0.1% m/m (1.7% y/y, remaining at its lowest reading since May 2015) in May but market expectations were for a 0.2% m/m rise in June.

The energy index declined again in June, falling 1.6% m/m (+2.3%y/y), offsetting the monthly increase in the index for all items less food and energy. This was this index's fifth monthly decline in the past six months. All the major energy component indexes declined in June, with the gasoline prices falling 2.8% m/m (-0.4% y/y). The food index was unchanged in June from May (+0.9% y/y) following a 0.2% m/m increase in May.

The June increase in the index for all items less food and energy was its third straight such increase. The rise was due to core services prices. Goods prices excluding food and energy fell 0.1% m/m (-0.6% y/y) for their fourth consecutive monthly decline. Of the major categories, only prices of medical care goods posted a monthly increase (+0.7% m/m, +3.2% y/y) in June.

Prices of services excluding energy rose 0.2% m/m in June (+2.5% y/y) with monthly increases in all the major subcategories. The shelter index continued to rise (+0.2% m/m), and the indexes for medical care (+0.3% m/m), motor vehicle insurance (+1.0% m/m), education (+0.3% m/m), and personal services (+0.3% m/m) also increased. Airfares (-2.7% m/m) and prices for wireless telephone services (-0.8% m/m) fell in June.

The consumer price data is available in Haver's USECON database while detailed figures can be found in CPIDATA. The expectations figure is from Action Economics and is found in the AS1REPNA database.

Consumer Price Index, All Urban Consumers (%) Jun May Apr Jun Y/Y 2016 2015 2014
Total 0.0 -0.1 0.2 1.6 1.3 0.1 1.6
Total less Food & Energy 0.1 0.1 0.1 1.7 2.2 1.8 1.7
  Goods less Food & Energy -0.1 -0.3 -0.2 -0.6 -0.5 -0.5 -0.3
  Services less Energy 0.2 0.2 0.1 2.5 3.1 2.6 2.5
 Food 0.0 0.2 0.2 0.9 0.3 1.9 2.4
 Energy -1.6 -2.7 1.1 2.3 -6.6 -16.7 -0.3
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