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The
Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6% in June (0.5%
expected)
after falling 0.1% in May. The gasoline index rose sharply in June after recent
declines and accounted for over half of the monthly increase in the seasonally
adjusted all-items index. The energy index increased 5.1% in June as the
gasoline index rose 12.3%. The food index
also rose in June, increasing 0.6% as the index for food at home continued to
rise.
The
index for all items less food and energy rose 0.2% in June, its first monthly
increase since February. The index for motor vehicle insurance increased
sharply in June after recent declines. The indexes for apparel, shelter, and
medical care also increased in June, while the indexes for used cars and
trucks, recreation, and communication all declined.
The
all items index increased 0.6% for the 12 months ending June; this compares to
a 0.1% increase for the 12 months ending May. The index for all items less food
and energy increased 1.2% over the last 12 months. The food index increased 4.5%
over the last 12 months, with the index for food at home rising 5.6%. Despite
increasing in June, the energy index fell 12.6% over the last 12 months.
The
Producer Price Index for final demand (PPI-FD) fell 0.2% in June (+0.4% expected).
This decrease followed a 0.4% increase in May and a 1.3% decline in April. In
June, the decrease in the final demand index is attributable to a 0.3% decline
in prices for final demand services. In contrast, the index for final demand
goods rose 0.2%.
On
an unadjusted basis, the final demand index moved down 0.8% for the 12 months
ended in June. Prices for final demand less foods, energy, and trade services
advanced 0.3% in June, the largest increase since a 0.3% rise in January. For
the 12 months ended in June, prices for final demand less foods, energy, and
trade services edged down 0.1%.
Final Demand
Final
demand services: The index for final demand services moved down 0.3% in June,
the largest decrease since falling 0.3% in February. The June decline can be
attributed to margins for final demand trade services, which dropped 1.8%.
(Trade indexes measure changes in margins received by wholesalers and
retailers.) Conversely, the indexes for final demand services less trade,
transportation, and warehousing and for final demand transportation and
warehousing services increased 0.3% and 0.9%, respectively.
Product
detail: Eighty percent of the June decline in the index for final demand
services can be traced to a 7.3% drop in margins for machinery and vehicle
wholesaling. The indexes for apparel, jewelry, footwear, and accessories
retailing; fuels and lubricants retailing; dental care; deposit services
(partial); and long-distance motor carrying also fell. In contrast, prices for
hospital inpatient care rose 0.8%. The indexes for transportation of passengers
(partial) and automobile retailing (partial) also increased.
Final
demand goods: The index for final demand goods rose 0.2% in June after
increasing 1.6% in May. Leading the June advance, prices for final demand
energy jumped 7.7%. The index for final demand goods less foods and energy
inched up 0.1%. Conversely, prices for final demand foods dropped 5.2%.
Product
detail: In June, a major factor in the increase in prices for final demand
goods was the gasoline index, which rose 26.3%. Prices for diesel fuel; jet
fuel; natural, processed, and imitation cheese; basic organic chemicals; and
fresh and dry vegetables also advanced. In contrast, prices for meats dropped
27.7%. The indexes for residential electric power and light motor trucks also
declined.
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The not-seasonally adjusted price indexes we track were mixed on both MoM and YoY bases.
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The foregoing comments represent the
general economic views and analysis of
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