With the Consumer Price Index (CPI) rising from 8.6% in May to 9.1% in June, it is important to understand what this number means. The CPI is a measurement put out by the U.S. Bureau of Labor Statistics. It measures the changes in price of food at home, food eating out, energy, electricity, gas prices, new and used vehicle costs, apparel, medical services, and many other items on a month to month basis. The 9.1% in June represents that the price of items in the index has risen 9.1% compared to June of 2021. This is known as a 12 month ended number. It doesn’t mean prices are up 9.1% in 2022 but that prices are up over the last twelve months.

So, with inflation increasing so dramatically, what is inside the CPI number? Well, a few of the items worthy of notation are:

  1. Food prices at home fell
  2. Food prices eating out rose
  3. Energy commodities doubled (gas being a significant contributor)
  4. Fuel oil dropped significantly
  5. New vehicle prices dropped
  6. Used vehicle prices dropped
  7. Transportation Services (Taxi, Uber, Lyft, etc.) rose
  8. Medical Care Services rose

So, the June CPI number can be characterized by an increase in energy prices, some food prices, and transportation services with decreases in fuel oil and vehicle prices. Looking ahead, inflation will most likely stay elevated for the foreseeable future. Will inflation keep rising? Only time will tell; however, every time inflation seems to be peaking, it rises further. Once again, only time will tell.

 

For the entire June CPI Report, click the link below.

https://www.bls.gov/news.release/cpi.nr0.htm

 

 

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