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Dr Swati Dhingra appointed to MPC


Analyst CPI Wraps (A-Z) – [3/3]


Analyst CPI Wraps (A-Z) – [2/3]

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--5 Things We Learned From The June CPI Data
By Kevin Kastner, Sara Haire, and Harrison Clarke
     WASHINGTON (MNI) - The following are the key points from the 
Consumer Price Index data for June released by the Bureau of Labor 
Statistics Thursday: 
     - June CPI rose 0.1% month/month overall, a bit softer than the 
0.2% gain expected by analysts and markets, but before rounding it was 
+0.129%, on the way to being rounded up. Core prices were up 0.2%, as 
expected, so the market reaction should be minimal. As highlighted in an 
MNI 5 Things, analysts have a track record of being very accurate with 
predicting June CPI. 
     - Core CPI was +0.162% unrounded, so on the low side of +0.2%. The 
large owners' equivalent rents category rose 0.3%, while medical care 
prices rose 0.4%, and new vehicle prices rose 0.4%. Additionally, used 
vehicle prices rose 0.7%, breaking a string of declines. Providing some 
offset, apparel prices were down 0.9% and lodging away from home prices 
fell 3.7%. 
     - As with the overall figure, the core CPI data are generally well 
forecasted by analysts, so today's data continue with that trend. The 
data also suggest a further increase for the core PCE price index. 
     - The y/y rate for headline CPI accelerated to 2.9% in June vs 2.8% 
in May, hitting the highest point since February 2012. At the same time, 
the y/y rate for core CPI rose to 2.3% from 2.2%, the highest since 
January 2017. Overall, the data suggest modest, but continued, 
acceleration in inflation what will allow the FOMC to continue on its 
gradual rate hike path. The one bump in the road is that rising 
inflation has compressed real average hourly earnings, which rose only 
0.1% in June and were flat year/year. 
     - Energy prices fell by 0.3% in June after a 0.9% increase in May, 
with gasoline prices up 0.5%, but electricity prices down 1.4% and gas 
utilities prices down 1.7%. Energy prices were actually up 1.0% 
unadjusted, so seasonal adjustment factors were a subtraction as prices 
for electricity and gasoline at the start of the summer did not jump as 
quickly as usual. CPI excluding only energy was up 0.2%, while food 
prices rose 0.2%. 
     ** MNI Washington Bureau: 202-371-2121 ** 

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