Despite some moderation in the core U.S. June consumer price data, we remain disturbed that many price elements remain elevated.
June CPI posted +0.3% and core +0.1% (+0.12911% unrounded). These produced +2.1% overall and +1.9% core over the year, the latter decelerating from its May pace and remaining within generally accepted standards.
Overall CPI was driven by gasoline at +3.3% (+0.3% before adjustment), which the Bureau of Labor Statistics said accounted for 2/3 the gain in the index. Of course, gas prices already have turned lower in July.
Food prices were up just 0.1% after four months of jumps as fruits and dairy prices turned lower. There is still a disturbing up-trend in food prices for the year.
Energy posted +1.6% in its third monthly gain, boosted by gas. But electric prices posted +0.2% and fuel oil -1.7%.
In core, apparel was +0.5% (with adult clothing up), drugs +1.0%, tobacco +1.0%, and airfares +0.4%. These were offset by new vehicles at -0.3% and used cars -0.4%. Medical services were flat as doctors' fees declined.
This represents a lopsided effect, with a few categories offsetting a more disturbing trend. And it is highly doubtful that medical fees will remain lower for long.
