The Bureau of Labor Statistics (BLS) released its Consumer Price Index report for June on Wednesday morning, showing an accelerating month-over-month increase in the cost of goods and services.
According to the latest print, headline CPI rose 0.2 percent in June, double the 0.1 percent monthly advance reported in May. Over the last 12 months, costs have risen three percent, something BLS emphasized was "the smallest 12-month increase since the period ending March 2021."
CPI for all items rises 0.2% in June; shelter up https://t.co/dJyJeKlXDJ #CPI #BLSdata
— BLS-Labor Statistics (@BLS_gov) July 12, 2023
Meanwhile, core CPI — a metric which excludes the more volatile food and energy indexes — increased 0.2 percent in June for a 4.8 percent annual advance.
The latest print of CPI explained that "shelter was the largest contributor to the monthly all items increase, accounting for over 70 percent of the increase, with the index for motor vehicle insurance also contributing."
Price changes over last year (June CPI report)
— Charlie Bilello (@charliebilello) July 12, 2023
Transportation: +8.2%
Shelter: +7.8%
Food away from home: +7.7%
Electricity: +5.4%
Food at home: +4.7%
New Cars: +4.1%
Overall CPI: +3.0%
Medical Care: -0.8%
Used Cars: -5.2%
Gas Utilities: -18.6%
Gasoline: -26.5%
Fuel Oil: -36.6%
In addition, the food index rose 0.1 percent in June due in part to a 0.4 percent increase seen in the index for food away from home. Energy costs continued to increase, with a 0.6 percent advance.
With headline CPI remaining at an annual rate of three percent and core CPI sitting at 4.8 percent, both metrics sit above the Federal Reserve's target rate of just two percent — and continue moving in the wrong, upward direction.
What's more, even though the June report's increase may look modest — and the president's team is sure to hype up BLS' heralding of the smallest annual increase since the early days of the Biden administration, that's not the full story. At all.
The three percent year-over-year headline CPI number represents a three percent gain on the inflation rate reported 12 months ago — which was the highest level of inflation reported in more than four decades. The June 2022 CPI print showed a 1.3 percent monthly advance for an annual increase of a whopping 9.1 percent.
So in an hour when we get the June CPI number, and media tells you how we beat inflation.
— Frog Capital (@FrogNews) July 12, 2023
Remember, the headline inflation number is the percentage over the same number 12 months ago.
June 2022 was the highest print in 41 years, and prices are still over that. pic.twitter.com/7TYj1OFKcS
That is, inflation is not "coming down" despite the smaller monthly increases. Goods and services paid for by Americans today are, in reality, even more expensive than they were when the CPI recorded its biggest annual increase. The only way for relief to actually be felt by Americans is for deflation to take over.
Alfredo Ortiz, the president and CEO of Job Creators Network, put the latest report in perspective by reminding what the last two-plus years of "Bidenomics" has caused. "The price of goods and services has risen by more than 16% over the course of President Biden's term," Ortiz reminded. "This destruction in the dollar's value has reduced Americans' real wages and living standards."
Indeed. For some 24 consecutive months, Americans have seen their real wages in negative territory as inflation outstripped any wage growth achieved.
"For some goods and services, such as food, prices are up more than 20%," Ortiz continued. "While inflation is finally coming back down, it remains far higher than the Federal Reserve's target rate, and it's important to remember today's price increases are compounding off a much higher base," he warned.
Reminder: The compounding effect of continuously rising prices stimulates the velocity of money, which makes inflation harder to contain & destroys savings & capital. That’s why it’s not enough for the headline CPI numbers to be in decline; only deflation allows the economy to… https://t.co/MtEALXkVz9
— Tom Elliott (@tomselliott) July 12, 2023
"Core inflation over the last year continues to outpace average wage growth, meaning Americans are still experiencing real wage destruction related to core goods and services. This high and sticky inflation is a direct result of Bidenomics, which emphasizes reckless government spending over free markets," said Ortiz.
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