The AIER Everyday Price Index increased by 0.8 percent in June, the seventh consecutive gain following back-to-back decreases in October and November. The most recent rise puts the 12-month gain at 6.1 percent, slightly below the 12-month gain of 6.5 percent in May but the third month in a row above six percent. The last time the Everyday Price Index posted three consecutive 12-month gains above six percent was July through September 2011.
The positive contributions were concentrated in food and energy categories and were led by household fuels and utilities (up 1.9 percent for the month and contributing 24 basis points) followed by motor fuels prices, up 2.2 percent and contributing 23 basis points, food at home (groceries), up 0.7 percent and adding 17 basis points, and food away from home (up 0.7 percent for the month and contributing 13 basis points).
The Everyday Price Index including apparel, a broader measure that includes clothing and shoes, rose 0.7 percent in June, the same increase as in May and also the seventh consecutive increase. Over the past year, the Everyday Price Index including apparel is up 6.0 percent, below the 6.5 percent pace in May. The back-to-back 12-month increases above six percent were the first since August and September 2011. Apparel prices fell 0.5 percent on a not-seasonally-adjusted basis in June, following a 0.2 increase in May. The June decline was the fifth drop over the past nine months. From a year ago, apparel prices are up 4.9 percent.
The Consumer Price Index, which includes everyday purchases as well as infrequently purchased, big-ticket items and contractually fixed items, rose 0.9 percent on a not-seasonally-adjusted basis in June. Over the past year, the Consumer Price Index is up 5.4 percent, the fastest pace since August 2008. The Consumer Price Index excluding food and energy rose 0.8 percent for the month (not seasonally adjusted) while the 12-month change came in at 4.5 percent.
After seasonal adjustment, the CPI rose 0.9 percent in June while the core also increased 0.9 percent for the month. Within the core, core goods prices were up 2.2 percent in June and are up 8.7 percent from a year ago while core services prices rose 0.4 percent for the month and are up 3.1 percent from a year ago.
Among the notable increases in the core CPI were used car and truck prices, up 10.5 percent for the month, accounting for about a third of the seasonally-adjusted increase in the total CPI. Over the past year, used car and truck prices have increased 45.2 percent. Other gainers include lodging away from home including hotels and motels (up 7.9 percent in June), car and truck rental rates (5.2 percent), airline fares (up 2.7 percent), new vehicles (up 2.0 percent), health insurance (1.5 percent), and motor vehicle insurance (1.2 percent).
Prices for many goods and services in the economy continue to be distorted by lingering effects from government restrictions on consumers and businesses including shortages, logistical and supply chain problems, and labor problems. As activity returns to normal, supply and demand will adapt and likely lead to slower price increases, but it may take some time before the economy completely returns to normal functioning. A 1970s-style upward price spiral remains unlikely.
Note: The Everyday Price Index for May is based on incomplete data due to restrictions on data collection by Bureau of Labor Statistics personnel because of the Covid-19 pandemic.
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