Latest CPI Report Highlights June Price Movements and Trends
The Consumer Price Index for All Urban Consumers (CPI-U) in June 2023 experienced a slight rise of 0.2 percent, following a 0.1 percent increase in May, according to a report released today by the U.S. Bureau of Labor Statistics. The Consumer Price Index is a widely recognized measure of inflation and provides valuable insights into changes in consumer prices over time, helping individuals and policymakers understand trends in inflation and the cost of living. Let’s delve into the details of the latest CPI report for June 2023.
Consumer Price Index: Monthly Price Changes
The monthly increase in the all-items index was driven primarily by rising shelter costs, which accounted for over 70 percent of the overall increase. Motor vehicle insurance costs also contributed to the uptick in prices. The food index saw a modest increase of 0.1 percent in June, following a 0.2 percent increase in May. Within the food index, the index for food at home remained unchanged, while the index for food away from home rose by 0.4 percent. The energy index rebounded in June with a 0.6 percent increase, as the major energy component indexes displayed mixed results.
Excluding Food and Energy
When excluding the volatile food and energy categories, the index for all items saw a 0.2 percent increase in June. This marks the smallest one-month rise in that index since August 2021. Among the categories that contributed to the increase were shelter, motor vehicle insurance, apparel, recreation, and personal care. However, several categories experienced declines, including airline fares, communication, used cars and trucks, and household furnishings and operations.
Annual Inflation Trends
Looking at the past 12 months, the all-items index increased by 3.0 percent, which represents the smallest 12-month increase since March 2021. When excluding food and energy, the index rose by 4.8 percent over the last year. In contrast, the energy index decreased by 16.7 percent, reflecting a significant decline in energy prices. On the other hand, the food index increased by 5.7 percent during the same period.
Food Price Movements
Food prices experienced a slight rise of 0.1 percent in June. The index for food at home remained unchanged, following a 0.1 percent increase in May. Among the major grocery store food groups, fruits and vegetables saw an 0.8 percent increase in June, while cereals and bakery products rose by 0.1 percent. However, the index for meats, poultry, fish, and eggs decreased by 0.4 percent, primarily driven by a sharp decline of 7.3 percent in the index for eggs. The other food at home index decreased by 0.2 percent, and the indexes for dairy and related products and nonalcoholic beverages declined by 0.3 percent and 0.1 percent, respectively.
The food away from home index rose by 0.4 percent in June. Within this category, the index for full-service meals increased by 0.3 percent, while the index for limited-service meals rose by 0.4 percent.
Over the past 12 months, the food-at-home index increased by 4.7 percent. The index for cereals and bakery products rose by 8.8 percent, while the index for meats, poultry, fish, and eggs declined by 0.2 percent. The remaining major grocery store food groups posted increases ranging from 2.7 percent for dairy and related products to 7.6 percent for nonalcoholic beverages. Meanwhile, the food away from home index rose by 7.7 percent over the last year. The index for full-service meals increased by 6.2 percent, and the index for limited-service meals rose by 7.8 percent during the same period.
Energy Price Movements
After a decrease of 3.6 percent in May, the energy index rebounded in June with a 0.6 percent increase. The gasoline index increased by 1.0 percent, following a significant decrease of 5.6 percent in the previous month. Before seasonal adjustment, gasoline prices rose by 0.7 percent in June. Other energy components displayed mixed movements, with the index for electricity increasing by 0.9 percent after falling for three consecutive months. The natural gas index decreased by 1.7 percent for the fifth consecutive month, while the index for fuel oil fell by 0.4 percent.
Over the past 12 months, the energy index declined by 16.7 percent. The gasoline index decreased by 26.5 percent, reflecting a significant drop in gasoline prices. Similarly, the natural gas index fell by 18.6 percent, and the fuel oil index experienced a sharp decline of 36.6 percent. In contrast, the index for electricity rose by 5.4 percent over the last year.
All Items Excluding Food and Energy
The index for all items less food and energy, often considered a measure of core inflation, rose by 0.2 percent in June. Within this category, the shelter index increased by 0.4 percent over the month, following a 0.6 percent rise in May. Both rent and owners’ equivalent rent saw increases, while the index for lodging away from home experienced a 2.0 percent decrease in June after a significant increase of 1.8 percent in May.
The shelter index played a significant role in the monthly increase in the index for all items less food and energy. Other categories that contributed to the increase in June were motor vehicle insurance (1.7 percent increase), apparel (0.3 percent increase), recreation, and personal care. However, several categories experienced declines, including airline fares (8.1 percent decrease), communication (0.5 percent decrease), household furnishings and operations (0.1 percent decrease), and new vehicles (unchanged).
Additionally, the medical care index remained unchanged in June, following a 0.1 percent increase in the previous month. Within medical care, the index for physicians’ services rose by 0.7 percent, while the index for hospital services increased by 0.4 percent. The index for prescription drugs remained unchanged in June.
Over the past 12 months, the index for all items less food and energy rose by 4.8 percent. The shelter index saw a significant increase of 7.8 percent over the last year, accounting for over two-thirds of the total increase in all items less food and energy. Other categories with notable increases over the last year include motor vehicle insurance (16.9 percent), recreation (4.3 percent), household furnishings and operations (3.6 percent), and new vehicles (4.1 percent).
Not Seasonally Adjusted Consumer Price Index Measures
The not-seasonally adjusted Consumer Price Index for All Urban Consumers (CPI-U) increased by 3.0 percent over the past 12 months, reaching an index level of 305.109 (1982-84=100). For the month of June, the index increased by 0.3 percent prior to seasonal adjustment.
Similarly, the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased by 2.3 percent over the last 12 months, reaching an index level of 299.394 (1982-84=100).