Recent Updates

  • China: Oil Consumption (Oct)
  • Philippines: Producer Price Index (Nov)
  • Australia: Retail Trade (Oct), Retail Deposits and Investment Rates (Nov)
  • Australia: Regional Climate Summaries (Nov)
  • more updates...

Economy in Brief

Another Disappointing U.S. Consumer Prices Report
by Sandy Batten  July 13, 2022

• Headline index jumped up 1.3% m/m, led by surging food and energy prices.

• Annual headline rate rose to highest since November 1981.

• Increase in core prices broadly based.

Consumer prices continued to soar in June. The Consumer Price Index surged 1.3% m/m after a 1.0% monthly increase in May. The y/y rate rose from 8.6% to 9.1%, the highest reading since November 1981. The Action Economics Forecast Survey had expected a 1.1% m/m increase. The core index (that is, excluding food and energy prices) advanced 0.7% m/m in June versus a 0.6% m/m increase in May. The y/y rate slowed for the third consecutive month to 5.9% y/y in June from 6.0% in May. The recent high in the y/y core rate was 6.5% in March. The Action Economics Forecast Survey had anticipated a 0.5% monthly gain in the core index.

While the June rise was broadly based, sharply rising food and energy prices continued to play a leading role. Energy prices increased 7.5% m/m in June after a 3.9% m/m rise in May. Their 41.6% y/y advance in June was the fastest annual increase since April 1980. An 11.2% m/m surge in gasoline prices led the monthly rise in overall energy prices. The price of natural gas rose 8.2% m/m in June on top of an 8.0% monthly gain in May. By contrast, the price of fuel oil fell 1.2% m/m, the first monthly decline since last December, but this was after a 16.9% m/m jump in May.

Food prices jumped up 1.0% m/m in June versus 1.2% in May with the y/y rate rising to 10.4%, its highest rate since February 1981. In the first six months of this year, food prices have risen at a 12.5% annual rate. While prices generally rose across all major food categories, the price of meat, poultry, fish and eggs slipped 0.4% m/m in June, the first monthly decline since September 2020, after four consecutive months of increases greater than 1% m/m.

Prices of commodities less food and energy rose 0.8% m/m (7.2% y/y) in June versus a 0.7% monthly increase in May. The y/y rate has now slowed for four consecutive months from a recent high of 12.3% y/y in February. New vehicle prices rose 0.7% m/m in June, down from a 1.0% m/m advance in May, while used vehicle prices posted another solid gain of 1.6% m/m on top of a 1.8% monthly rise in May. Apparel prices increased 0.8% m/m in June, up slightly from their 0.7% m/m advance in May.

Services prices less energy services rose 0.7% m/m (5.5% y/y) in June, roughly the same as in each of the prior three months. The cost of shelter, the largest component of this category, rose 0.6% m/m (5.6% y/y) in June, the same monthly advance as in May and the highest since March 2004. The 5.6% annual rate of increase was the highest since February 1991. The price of other lodging away from home (which includes hotels and motels) fell 3.3% m/m in June. Prices of medical services gained 0.7% m/m (4.8% y/y). These prices rose 9.5% from January to May. The monthly increase was the largest since October 2019. Transportation services prices jumped up 2.1% m/m in June notwithstanding a 1.8% m/m decline in airfares following a 12.6% m/m surge in May.

The Consumer Price Index data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.

close
large image