JUNE CPI UP 1.1%, CORE RATE UP 0.3%
The June CPI rose 1.1%, higher than analysts had expected and the largest monthly increase since the Katrina-related price spike in September 2005. The core rate rose 0.3%, above the 0.2% increase that analysts had expected. On a year-over-year basis CPI is up 5%, its largest 12-month gain since 1991 and the core rate is up 2.4% from last June.
Energy prices rose 6.6% in June, the largest gain since 2005. Energy price increases reflected a 10% increase in both gasoline and fuel oil. Natural gas rose almost 5% during the month.
Food prices rose 0.8% in June and are up 5.3% during the past 12 months. Vegetable prices increased 6.1%, their largest price gain since 2001. Dairy prices rose 1.6% and beef prices rose 1.7%.
The core CPI rose 0.3%, its largest increase since January. Rents increased 0.4% and the Labor Department’s assessment of owner’s equivalent rent rose 0.3% during the month. Core commodities rose 0.1% reflecting small gains in apparel and vehicle prices. Core services rose 0.4% as medical care services rose 0.3%, airline fares rose 4.5% and tuition costs rose 0.5%. Core services are up 3.3% from June 2007 and core commodities are virtually unchanged from year earlier levels despite the falling dollar putting upward pressure on the prices of imported goods.