Filed Under: U.S.

June CPI report: 9.1% increase in prices over last year, core CPI at 5.9%

By ,

According to the Labor Department’s Consumer Price Index (CPI) report for the month of June, prices increased on both a monthly and annual basis, by 1.3% and 9.1%, respectively. As seen in previous months, year-to-year inflation set another 40+-year high in June, going all the way back to 1981.

The record inflation continues to be fueled by a spike in gas costs, more expensive food and rent, and pricier cars and hotel rooms. So-called “core” CPI, which strips away volatile food and energy prices, actually went down year-on-year from May to June, from 6% to 5.9% respectively.

Even gas prices have fallen since they touched a national average of $5 per gallon last month, down to $4.63 per gallon as of Wednesday. The drop points to the potential for sharply lower inflation in July.

While the core CPI and falling gas prices may be a sign of cooling inflation, the June CPI report as a whole may pave the way for the Federal Reserve to take more aggressive action at its next meeting later this month. The market expects the central bank to raise the key Fed funds target rate by 75 basis points. That would be the Fed’s third consecutive rate hike, totaling 2% in hikes.

“I don’t like to prejudge a meeting, but if the, if the meeting was today, I would support the 75 basis point move,” St. Louis Federal Reserve President James Bullard said Tuesday.

While Bullard believes “we should be able to return inflation to 2% without too much disruption in the economy,” others aren’t convinced. Dan Wantrobski, the associate director for research at Janney Montgomery Scott LLC, predicted a recession “to most likely touch down sometime in 2023” on Tuesday.

“We actually think it’s going to be much more benign in scope,” Wantrobski said. “Labor markets are going to remain tight and it’s actually going to be more of a consumer-led recession based on all the headline price inflation we’re currently seeing and that the Fed is trying to fight.”

The Associated Press and Reuters contributed to this report.

Simone Del Rosario NEW THIS MORNING, INFLATION HAS TOPPED 9% FOR THE FIRST TIME SINCE 1981. 

JUNE CONSUMER PRICES ARE UP 9.1% FROM A YEAR AGO, COMING IN HOTTER THAN ANALYSTS EXPECTED, AND A HALF POINT LEAP FROM MAY, WHICH WAS ALSO A 4-DECADE HIGH.

GAS PRICES – ARE THE BIGGEST DRIVER IN JUNE. 

UP 11.2% ON THE MONTH!

59.9% ON THE YEAR!

OF COURSE JUNE IS WHEN WE SAW GAS PRICES HIT A NATIONAL RECORD, 

AT $5.02 FOR REGULAR UNLEADED, ACCORDING TO TRIPLE A.

AS WE LOOK AHEAD – ANALYSTS ARE HOPEFUL THAT THIS 9.1% READING COULD BE THE PEAK. MOSTLY SINCE JULY BRINGS RELIEF AT THE PUMP.

GAS IS 4.63 A GALLON TODAY, 39 CENTS LOWER THAN THE HIGHEST MARK EVER RECORDED ONE MONTH AGO.

BUT WITH CONSUMER PRICES RISING IN NEARLY EVERY CATEGORY IN JUNE, THE CONSENSUS IS THE FEDERAL RESERVE WILL TAKE THESE NUMBERS TO JUSTIFY ANOTHER THREE QUARTER % RATE HIKE AT ITS NEXT MEETING IN TWO WEEKS. THAT WILL CAUSE INTEREST RATES TO GO UP ON EVERYTHING FROM MORTGAGES TO CREDIT CARDS. 

IN NEW YORK FOR JUST BUSINESS I’M SIMONE DEL ROSARIO. 

According to the Labor Department’s Consumer Price Index (CPI) report for the month of June, prices increased on both a monthly and annual basis, by 1.3% and 9.1%, respectively. As seen in previous months, year-to-year inflation set another 40+-year high in June, going all the way back to 1981.

The record inflation continues to be fueled by a spike in gas costs, more expensive food and rent, and pricier cars and hotel rooms. So-called “core” CPI, which strips away volatile food and energy prices, actually went down year-on-year from May to June, from 6% to 5.9% respectively.

Even gas prices have fallen since they touched a national average of $5 per gallon last month, down to $4.63 per gallon as of Wednesday. The drop points to the potential for sharply lower inflation in July.

While the core CPI and falling gas prices may be a sign of cooling inflation, the June CPI report as a whole may pave the way for the Federal Reserve to take more aggressive action at its next meeting later this month. The market expects the central bank to raise the key Fed funds target rate by 75 basis points. That would be the Fed’s third consecutive rate hike, totaling 2% in hikes.

“I don’t like to prejudge a meeting, but if the, if the meeting was today, I would support the 75 basis point move,” St. Louis Federal Reserve President James Bullard said Tuesday.

While Bullard believes “we should be able to return inflation to 2% without too much disruption in the economy,” others aren’t convinced. Dan Wantrobski, the associate director for research at Janney Montgomery Scott LLC, predicted a recession “to most likely touch down sometime in 2023” on Tuesday.

“We actually think it’s going to be much more benign in scope,” Wantrobski said. “Labor markets are going to remain tight and it’s actually going to be more of a consumer-led recession based on all the headline price inflation we’re currently seeing and that the Fed is trying to fight.”

The Associated Press and Reuters contributed to this report.

Get ready to rate in…

Community Rating

Community ratings are revealed after you rate the story.

lock

Watch the report to unlock rating

Rate the bias

Keep us honest! Let us know if you thought this video was neutral or biased.

Comments are still pending approval. Rate this story to add your own thoughts below.

Recent Reports