As expected, the June Consumer Price Index Summary is not filled with good news.
What was not expected was how bad some of the news turned out to be.
The all items index rose 2.7 percent for the 12 months ending June, after rising 2.4 percent over the 12 months ending May. The all items less food and energy index rose 2.9 percent over the last 12 months. The energy index decreased 0.8 percent for the 12 months ending June. The food index increased 3.0 percent over the last year.
How does this compare with the forecasted rise in consumer price inflation?
Overall, economists expect that consumer prices rose 0.23% on a monthly basis and 2.6% on an annual basis, according to FactSet’s consensus estimates. Excluding volatile food and energy prices, economists expect 0.30% monthly core inflation and 3.0% annual core inflation in June. Data in line with these forecasts would be a significant change from May, when inflation came in softer than analysts anticipated.
The Cleveland Federal Reserve’s inflation nowcast projected headline inflation year on year of 2.64%.
Core inflation was projected to be just under 2.95%.
Both projections were noticeably above May’s actual numbers, anticipating inflation would run significantly hotter in June. The actual headline inflation print was even hotter than the projection.
This much is certain. This latest rise in consumer prices coupled with recent erosions in real wage growth means that wages are still languishing behind their pre-2021 levels relative to consumer prices.
This latest inflation report merely underscores that the recovery in wages is far from complete—and wage recovery is the necessary prerequisite for actual wage growth.
The data suggested this would be a bad inflation print. The data was right.
What was your experience of consumer prices in June? Did you see prices rise, fall, or hold steady?Please let me know in the comments or drop a note in chat.
It looks pretty much as you called it, Peter. However, the Epoch Times noted that core inflation came in slightly lower than expected:
https://www.theepochtimes.com/business/inflation-ticks-up-again-in-june-as-annual-rate-reaches-2-7-percent-5887575?utm_source=ref_share&utm_campaign=copy
Any thoughts on this?
Also, do you see anything in the just-released data that you find more worrisome than you had anticipated?