Gain in Core Inflation in June


In June, core inflation increased relative to May, while headline inflation remained unchanged.

The Bureau of Labor Statistics (BLS) released the Consumer Price Index for June. On a seasonally adjusted basis, the Consumer Price Index (CPI) rose by 0.1% in June, the same increase as in May. Excluding the volatile food and energy components, the “core” CPI increased by 0.3% in June, after four straight monthly gains of 0.1%. It was the largest monthly increase since January 2018. The June increase in core inflation was driven mainly by increases in the prices of used cars and trucks (+1.6%) and apparel (+1.1%).

The price index for a broad set of energy sources dropped by 2.3% in June, compared to last month. In June, all of the major energy component indexes declined. The food index was unchanged in June, after a 0.3% increase in May.

The figure below shows monthly changes in the CPI, the “core” CPI, energy prices and the food index in May and June.

Over the past twelve months, on a not seasonally adjusted basis, the CPI rose by 1.6% in June. It was the smallest gain since June 2016 on a year-over-year basis. Meanwhile, the “core” CPI increased by 2.1% over the past twelve months, after rising 2.0% in May.

NAHB constructs a “real” rent index to indicate whether inflation in rents is faster or slower than overall inflation. It provides insight into the supply and demand conditions for rental housing. When inflation in rents is rising faster (slower) than overall inflation, the real rent index rises (declines). The real rent index is calculated by dividing the price index for rent by the core CPI (to exclude the volatile food and energy components).

The Real Rent Index rose by 0.1% in June, the same increase as in May. Over the first six months of 2019, the monthly growth rate of the Real Rent Index was 0.2%, on average, higher than the average of 0.1% in 2018.

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  1. The view of inflation is always synonymous with inflation in the international context. actually the inflation rate in each country is different and the influence of monetary policy is not only felt in the monetary sector of the banking sector which is then transferred to the real sector but can also be seen from a regional perspective. The following is information about how the behavior of core inflation in one of the provinces in Indonesia was examined by a student at Airlangga University

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