US Inflation Rate at 1.7%, Consumer Prices Flat in June 2012
Lower gasoline prices offset rising food, medical care and other costs, flattening consumer prices in June and keeping US Inflation at the same 12-month rate as reported by the government in May.
Consumer prices were unchanged in June after dropping 0.3 percent in the previous month, the US Labor Department said Tuesday morning. Americans got a break at the pump as gasoline prices were down for a third straight monthly decline.
"The energy index declined 1.4 percent in June. This followed declines of 1.7 percent in April and 4.3 percent in May. The gasoline index fell 2.0 percent after a 6.8 percent May decline," the US Labor Department said in its monthly Consumer Price Index (CPI) report.
"The electricity index is the only major energy component to rise over the past year, increasing 0.5 percent," it added.
Setting aside energy, most other government watched items rose in June. Medical care expenses led gains at 0.7 percent after rising 0.5 percent in May.
Food prices were up 0.2 percent after being flat in May. Increases within the category included 1.3 percent for fresh fruits and vegetables, 0.2 percent for meats, poultry fish and eggs, and 0.1 percent for soft drinks. There were a few bright spots with dairy products down 0.3 percent and cereals and baked goods lower by 0.4 percent.
Stripping out costs for food and energy, the so-called core US inflation rate rose 0.2 percent in June for a fourth consecutive month.
US inflation rose 1.7 percent over the past 12 months ending June, the same rate as May. Inflation on a 12-month basis was at 3.9 percent as recently as September. Lower energy prices are the main reason for recent easing, having dropped 3.9 percent from a year ago.
"The cost of living is likely to be contained," Ed Kashmarek, an economist at Wells Fargo Securities LLC in Minneapolis, said before the report, according to Businessweek. "U.S. demand is slowing. There is no reason and no ability for companies to raise prices in coming months."
Core US inflation advanced 2.2 percent over the past year, down from 2.3 percent during each of the 12-month readings in March, April and May.
"Stubborn is the exact right word," USATODAY.com quoted Drew Matus, an economist at investment bank UBS in New York. "The core inflation rate doesn’t seem to want to go down. Considering the weak economy you would expect core to go below 2%.”
The core US inflation is a barometer closely watched by the Federal Reserve as it helps determine where the central bank sets its key interest rate. The level remains above the Fed’s 2.0 percent target area, but the Fed expects the rate to move lower.
"The central tendency of the Committee’s projections is that inflation will be 1.2 to 1.7 percent this year, and at or below the 2 percent level that the Committee judges to be consistent with its statutory mandate in 2013 and 2014," Fed Chairman Ben Bernanke testified before Congress on Tuesday.
The following table offers US Labor Department inflation data ranging from December to June and over the past 12 months.
June 2012 Consumer Prices – Gains (percent)
|Food at home||0.3||.0||.0||0.1||0.2||-0.1||0.1||2.6|
|Food away from home||0.2||0.4||0.1||0.2||0.3||0.2||0.2||2.9|
|Gasoline (all types)||-2.0||0.9||6.0||1.7||-2.6||-6.8||-2.0||-4.3|
|Utility (piped) gas service||-0.8||-2.9||-3.4||0.9||-1.8||-4.1||1.7||-13.6|
|All items less food, energy||0.1||0.2||0.1||0.2||0.2||0.2||0.2||2.2|
|Comm. less food, energy||-0.2||0.2||0.1||0.2||0.2||0.2||0.2||1.4|
|Used cars and trucks||-0.9||-1.0||-0.2||1.3||1.5||1.0||.0||2.3|
|Services less energy||0.3||0.2||0.1||0.2||0.3||0.2||0.2||2.5|
July 2012 Consumer Price Index information will get released by the US Labor Department on August 15, 2012 at 8:30 AM ET. Current and historic CPI information is used as the core data for this site’s Inflation Calculator.