Consumer prices shot up 0.9% in June
Prices for goods and services, excluding food and energy, shot up 0.9% in June on a month-over-month basis, according to the Core Consumer Price Index reading published Tuesday morning.
Why it matters: That’s an uptick from May’s monthly change of 0.7%. Economists were expecting an increase of 0.4%.
- Including energy and food prices, the headline CPI figure shows a 0.9% monthly increase, compared to a 0.6% uptick in May.
- On a yearly basis, June prices shot up 5.4%, compared to the 5% change in May.
The big picture: The higher-than-expected reading will rekindle debates about whether inflation is truly temporary.
- Investors largely believe elevated levels of inflation will be transitory, as the Fed reiterated in its meeting last month.
- Meanwhile, consumer expectations for inflation over the coming year reached their highest level ever, according to a survey released Monday by the Federal Reserve Bank of New York.
Zoom in: Used car prices continued to account for one-third of monthly CPI growth last month, as they did in May.
- The category grew 10.5% in June month over month, compared to 7.3% in May and 10% in April. Prices shot up 45.2% year over year.
- Car and truck rental prices saw a softening in price growth in June, up 5.2% monthly compared to 12.1% in May and 16.2% in April. Yearly, prices were 87.7% higher.
- By comparison, new vehicle prices grew 2% last month, the largest one-month increase in 40 years.
Signs that the reopening of the economy was well underway last month: Hotel prices, women's dresses and raw beef prices were some of the fastest rising categories.
- Hotel prices rose 7.9% month over month.
- Uncooked beef and veal prices rose 6.4%.
- Women's dress prices rose 5%, up from a 1% increase from April to May. Dress prices also rose higher than the growth in the overall women's apparel category of 1.6% last month.
- Airline fares rose 2.7%, down from a 7% growth the prior month.