The US Bureau of Labor Statistics has released the report on the latest inflation numbers. The US CPI data for June has been announced on July 12 and now all eyes will be on US Fed’s next FOMC meeting on July 25-26. In the United States, annual inflation fell to 3% in June 2023, marking the 12th consecutive month of declines and the lowest number since March 2021. It compared to 4% in May and 3.1% predictions. The decline is due in part to a large base effect from last year, when a jump in energy and food costs pushed headline inflation to 1981 highs of 9.1%. In June of this year, the energy index fell 16.7% while the food index rose 5.7%.
The Consumer Price Index for All Urban Consumers (CPI-U) rose 0.2 percent in June on a seasonally adjusted basis, after increasing 0.1 percent in May, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 3.0 percent before seasonal adjustment.
The all items index increased 3.0 percent for the 12 months ending June; this was the smallest 12-month increase since the period ending March 2021. The all items less food and energy index rose 4.8 percent over the last 12 months. The energy index decreased 16.7 percent for the 12 months ending June, and the food index increased 5.7 percent over the last year.
In May, inflation reached its lowest level in over two years, with consumer price index rising 0.1% and 4% year on year. Core inflation jumped 0.4%, remaining at 5.3% year on year. The Consumer Price Index (CPI) tracks changes in the prices consumers pay for products and services. The CPI reflects the spending habits of two populations: all urban consumers and urban wage earners and clerical workers.
FOMC which met last month on June 13-14 had decided to keep the interest rate unchanged. However, going forward, the Fed is expected to resume rate hikes by raising rates by 25 bps each in July and September. Fed continuing its aggressive tightening policy means more damage to the financial industry and an economic downturn.