Oil prices had fallen a lot in June as the Iran conflict took a pause. Those prices are headed somewhat up again as the conflict is resuming. So there was an expectation that the June consumer price index would not show much of an increase, but the actual report was far better, with inflation actually declining .4% in the month versus expectations of a .1% increase. For the last 12 months running through June, inflation is up 3.5%, which is still too high. Both goods and services are seeing a slowing in price rises. Energy prices were down 5.7% for the month but up 15.7% over the last 12 months. The core CPI, without food and energy, also was lower than expectations, being unchanged for the month.
Food costs have been under control for the last year, as have shelter or housing costs. Medical services prices might be experiencing a slower growth rate. In general a lot of the items that are most meaningful to consumers are seeing lower price growth. At the same time, real, after inflation, wages grew .8% in June, which is great news. For at least a month, consumers and workers can feel like their income is growing faster than the costs of things they buy. (BLS Release)
