June Consumer Price Inflation Unchanged

Today's June CPI came and unlike virtually every other print in the past 2 months, wasn't an abysmal miss: printing at 0.0% for the headline and 0.2% for the core, it was precisely in line with expectations. As the chart below shows, there has been one month of declining headline CPI in 2012 - and somehow this is supposed to usher in hundreds of billions in QE and/or the Fed volunteering to destroy the short-term funding market using negative IOER rates. Brilliant.

but according to Bloomberg's survey this is the biggest beat (a fractional 5bps) of expectations since August 2011...

Some of the notable sequential changes:

  • Food: +0.2%
  • Energy: -1.4%
  • Fuel Oil: -7.9%
  • Electricity: -0.5%
  • Gas Service: 1.7%
  • Apparel: 0.5%
  • Shelter: +0.1% - uhm, did someone forgot to poll New York rents?
  • Medical Care Services: +0.7%

Finally for those who still eat and use gas:



The food index rose 0.2 percent in June after being unchanged in May. The index for food at home turned up in June, rising 0.1 percent after declining 0.1 percent the prior month. Major grocery store food groups were mixed, with three rising and three declining. The fruits and vegetables index rose 1.3 percent as the fresh vegetables index increased 3.2 percent. The index for meats, poultry, fish, and eggs rose 0.2 percent, and the nonalcoholic beverages index rose 0.1 percent. In contrast, the index for cereals and bakery products declined 0.4 percent in June after falling 0.1 percent in May. The index for dairy and related products declined 0.3 percent in June, its fifth consecutive decline, and the index for other food at home fell 0.1 percent. The food at home index has risen 2.6 percent over the past 12 months, with all six major grocery store food groups rising from a range of 0.9 percent (nonalcoholic beverages) to 4.1 percent (other food at home). The index for food away from home rose 0.2 percent in June and has increased 2.9 percent over the past year.




The energy index declined 1.4 percent in June. This followed declines of 1.7 percent in April and 4.3 percent in May. The gasoline index fell 2.0 percent after a 6.8 percent May decline. (Before seasonal adjustment, gasoline prices decreased 6.1 percent in June.) The fuel oil index fell sharply in June, declining 7.9 percent. The electricity index, which rose 0.3 percent in May, fell 0.5 percent in June. In contrast to these declines, the index for natural gas turned up in June, rising 1.7 percent after declining 4.1 percent in May. For the last 12 months, the gasoline index has declined 4.3 percent, the fuel oil index has fallen 6.8 percent, and the index for natural gas has decreased 13.6 percent. The electricity index is the only major energy component to rise over the past year, increasing 0.5 percent.


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