Courtesy of Doug Short.
The Bureau of Labor Statistics released the CPI data for last month this morning. Year-over-year Headline CPI came in at 1.66%, which the BLS rounds to 1.7%, essentially unchanged from 1.70% (not rounded) last month. Year-over year-Core CPI (ex Food and Energy) came in at 2.22%, which the BLS rounds to 2.0%, down fractionally from 2.26% (rounded to 2.3%) last month.
Here is the introduction from the BLS summary:
The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in June on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 1.7 percent before seasonal adjustment.
The energy index continued to fall in June, but its decline was offset by increases in the indexes for food and all items less food and energy. The energy index fell 1.4 percent as the gasoline index declined for the third month in a row; other energy indexes were mixed. The food index rose 0.2 percent after being unchanged last month as the index for food at home turned up in June.
The index for all items less food and energy rose 0.2 percent in June, the fourth consecutive such increase. The shelter index posted its smallest increase since September, the index for used cars and trucks was unchanged after a series of increases, and the index for airline fares declined. However, the index for medical care posted its largest increase since 2010 and the indexes for apparel and recreation both rose substantially in June.
The 12-month change in the index for all items was 1.7 percent in June, the same figure as in May. The energy index declined 3.9 percent over the last 12 months, while the food index rose 2.7 percent. The index for all items less food and energy rose 2.2 percent for the 12 months ending June, a slight decline from the 2.3 percent figure in May. More…
The Briefing.com month-over-month consensus forecast was 0.1% for Headline (versus 0.0% actual) and 0.2% Core (matching the 0.2% actual).
The first chart is an overlay of Headline CPI and Core CPI (the latter excludes Food and Energy) since 1957. The second chart gives a close-up of the two since 2000.
On the next chart I’ve highlighted the 2% level, which is generally understood to be the Fed’s target for core inflation. Here we see more easily see the widening spread between headline and core CPI since late 2010, a pattern that began changing last October as headline inflation declined while core continued to rise, although it has flattened out in 2012.
Federal Reserve policy, which focuses on core inflation, and especially the core Personal Consumption Expenditures (PCE), will see that the latest core CPI is fractionally above the target range, even though the more volatile headline inflation has fallen below two percent.
