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Consumer prices rebounded in June, but that’s not the whole story

Consumer prices rose in June after three straight months of declines, as the cost of gas and food increased.

The consumer price index, which measures what Americans pay for everything from clothing to appliances, rose 0.6% last month on a seasonally adjusted basis, the Bureau of Labor Statistics said Tuesday. In May, prices declined 0.1%.

The consumer price index is a closely watched indicator during recessions. The National Bureau of Economic Research said last month that the United States entered a recession in February.

Price increases are an encouraging sign of consumer spending — but Chris Rupkey, chief financial economist at MUFG Union Bank, warned in a note after Tuesday’s numbers that “inflation is unlikely to reappear on the radar screens of Federal Reserve officials for years.”

He predicts that “consumer inflation will remain low for the foreseeable future, except for a few Covid-19 price shocks from items in high demand like food at home.”

The gasoline index soared 12.3% in June, while food prices rose 0.6%.

Because food and energy categories are volatile, the government reports a separate index for core prices. That metric showed a 0.2% uptick in June, the first monthly increase since February. Core prices were down 0.1% in May.

Meat costs continue to rise

Prices for food at home increased 0.7% from May to June, with much of the jump driven by meat prices.

Overall, beef and veal prices rose 4.8%. From April to May, that price increase was an even more dramatic 11%. Temporary closures of meat processing plants have been driving meat prices up.

Pork prices grew 3.3%, and bacon got 8.1% more expensive. Hot dog prices grew 4.9%.

But fish, eggs and dairy have been getting slightly cheaper. Fish and seafood prices fell 0.7%, dairy prices slipped 0.4%, and egg prices fell by 2.7%.

Apparel and home supply costs grow

Prices for window and floor coverings and other linens grew 2.1%, and bedroom furniture got 1.6% more expensive. Appliance prices gained 1.7%, and outdoor equipment and supply costs grew 1.3%.

Apparel costs also increased. Overall, clothing was 1.7% more expensive in June. The cost of infant and toddler apparel grew 6.5%.

Men’s suits prices went up by 4.7%. The increase could be welcome news for retailers that are struggling as office wear becomes irrelevant.

For women’s and girls’ clothing, the price increase was a more modest at 0.9%.

CNN

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