Inflation fell in June, but still remains high following the Federal Reserve’s pause on interest rate hikes, according to the latest Bureau of Labor Statistics (BLS) report released on Wednesday.
The Consumer Price Index (CPI), a broad measure of prices of everyday goods such as energy and food, increased 3.0% on an annual basis in June compared to 4.0% in May, according to the BLS. Core CPI — which excludes energy and food — remained high, rising 4.8% year-over-year in June, compared to 5.3% in May. (Inflation Ticks Down — But Remains Well Above Fed’s Target)
Energy rose 0.6% in June, marking a fall of 16.7% for the year. Food rose 0.1% in June, matching the increase in May, making the total rise for the year 7.7%.
Shelter was once again the greatest contributor to inflation, totaling 7.8% for the year and accounting for over two-thirds of the total increase in core CPI following a similar increase in May. Other notable increases were motor vehicle insurance rising 16.9% and recreation rising 4.3% for the year.
“The rate of price increases since June 2022 is about 50% faster than the average rate of price increases during the period from the Great Recession until the Biden administration,” E.J. Antoni, research fellow at the Heritage Foundation’s Grover M. Hermann Center for the Federal Budget, told the Daily Caller News Foundation. “Because the government is still spending, borrowing, and creating too much money, prices are continuing to rise at elevated rates.”
Short-term inflation expectations continue trending down while mid- and longer-term rise; and all 3 look to be converging around 3.5% – Fed has lost control of anchoring at 2%; meanwhile, people believe they’ll be poorer w/ earnings growth expectations below inflation: pic.twitter.com/rR3K49NcYE
— EJ Antoni (@RealEJAntoni) July 10, 2023
The change in inflation follows the first pause in interest rates by the Federal Reserve since March 2022. The Fed chose to keep interest rates within the range of 5% and 5.25% at the June Federal Open Market Committee meeting but anticipates hiking rates further on in the year to reach the 2% target for inflation.
The inflation announcement follows a jobs report showing unexpectedly low job growth, which only reported an additional 209,000 jobs in June, less than the 225,000 projected and far less than the 309,000 added in May. The report included concerning data involving the number of part-time workers added, showing that 452,000 part-time jobs were added in June for economic reasons, indicating many Americans are unable to employ workers full-time.
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