Consumer prices rise 0.7% in June

Key measure of inflation up more than expected, but last year's record-high gas prices trigger largest annual decline since January 1950.

EMAIL  |   PRINT  |   SHARE  |   RSS
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all RSS FEEDS (close)
By Julianne Pepitone, contributing writer

What's most important to you when choosing where to live?
  • Good jobs
  • Affordable homes
  • Top schools
  • Low crime
  • Things to do

NEW YORK ( -- A key index of consumer prices rose more than expected in June but showed the largest year-over-year decline since January 1950, the government said Wednesday.

The Consumer Price Index, the Labor Department's key measure of inflation, has fallen 1.4% over the past year.

That's the largest drop in more than 59 years, and is due largely to a 25.5% over-the-year decline in the energy index.

"It's a bit of a bogus comparison, because we're comparing gas prices at nearly their astronomical peak last year," said Stuart Hoffman, economist at PNC, referring to the the-record high price of $4.114 per gallon reported on July 17, 2008.

On a monthly basis, CPI rose 0.7% in June, after rising 0.1% the previous month. Economists surveyed by expected a 0.6% increase.

That's the largest monthly increase in 11 months. CPI also rose 0.7% in July 2008, Hoffman said.

The report attributed the month-to-month increase to the gasoline index, which rose 17.3% in June. But a decline of 1.9% in the electricity index helped offset the gas price jump, causing the overall energy index to settle up 7.4%.

Core CPI and inflation: The even more closely watched core CPI, which excludes volatile food and energy prices, increased 0.1% on an annual basis, after gaining the same amount in May. Core CPI increased 1.7% on an annual basis.

"It's comforting to know gas prices are the main fly in the ointment," Hoffman said. "That shows inflation is not a concern."

The July reading due next month is likely to reflect the recent decline in gas prices. According to a daily survey conducted for motorist group AAA, prices have declined 24 straight days, by a total of about 7%.

Inflationary concerns would arise if the core CPI rose 0.3%-0.4% for a few months straight, Hoffman said. Conversely, if the core stayed flat for consecutive months it would trigger deflation worries, he said.

Sector-by-sector: Most sectors saw at least a small uptick. The indexes for shelter and medical care posted slight increases in June, and indexes for new vehicles, used cars and trucks, recreation and apparel increased at least 0.5%.

The food index, which had fallen for the last four months, was unchanged in June.

The index for airline fares bucked the trend, though, falling 0.6%.  To top of page

They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Worry about the hackers you don't know 
Crime syndicates and government organizations pose a much greater cyber threat than renegade hacker groups like Anonymous. Play
GE CEO: Bringing jobs back to the U.S. 
Jeff Immelt says the U.S. is a cost competitive market for advanced manufacturing and that GE is bringing jobs back from Mexico. Play
Hamster wheel and wedgie-powered transit 
Red Bull Creation challenges hackers and engineers to invent new modes of transportation. Play

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.