Energy and Food Costs Rise in June
In June, consumer prices increased 0.3% over the month and 2.7% over the year, edging up from the 2.4% rise in May. Core CPI, which excludes more volatile energy and food prices, rose 0.2% over the month and 2.9% over the year, slightly higher than the 2.8% 12-month increase in the three months prior.
Energy costs jumped 0.9% over the month in June, after falling 1.0% in May, but they declined 0.8% over the year. Within the energy index, gasoline prices rose 1.0% from May, after dropping 2.6% the month prior, but they declined 8.3% from June 2024. Meanwhile, fuel oil, electricity and utility (piped) gas prices rose 1.3%, 1.0% and 0.5%, respectively, over the month.
In June, food prices increased 0.3% over the month, with prices for food at home rising at the same rate, while food prices rose 3.0% over the year. The indexes for major grocery store food groups were mixed, with half increasing and the other half decreasing. Meanwhile, prices for food away from home rose at the slightly faster pace of 0.4% from May and 3.8% from June 2024.
The shelter index grew 0.2% over the month and 3.8% over the year, dipping slightly from the 3.9% 12-month increase in May. Meanwhile, prices for transportation services advanced 0.2% over the month and 3.4% over the year, with motor vehicle insurance and motor vehicle maintenance and repair leading the increase, surging 6.1% and 5.2%, respectively, over the year. These increases more than offset decreases in airline fares, which dipped 0.1% over the month and 3.5% over the year.
Since January 2025, the over-the-year headline inflation rate has trended downward, but the inflation rate ticked up again in June, and Federal Reserve officials expect higher inflation in the coming months. Therefore, markets are anticipating that the Federal Open Market Committee will keep rates steady at its meeting next week, as it did in June. On the other hand, the possibility of a rate cut later in the year remains as weakness in the labor market has increased in recent months.