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US consumer inflation keeps 6-year record in June
WASHINGTON, July 13, 2018 (BSS/AFP) – Rising prices for food, gasoline,
shelter and medical care kept the annual measure of US consumer inflation at
a six-year high in June, the Labor Department reported Thursday.
The upward pressure on prices in the world’s largest economy was apparent
even excluding the volatile food and fuel categories, suggesting the
underlying trend could be sustained in the coming months.
The price gains come as President Donald Trump redoubles his trade wars
with major US trading partners, which economists say could soon fuel price
increases.
Washing machines, for instance, saw a record price surge following the
tariffs Trump imposed in January, growing by 2.8 percent — the largest rise
since the Labor Department started tracking them in December 1977.
A monthly dip in electricity and natural gas prices held down the Consumer
Price Index for June, which rose 0.1 percent compared to May, a tenth of a
point slower than economists expected.
The modest rise in CPI, which tracks prices for household goods and
services, came despite a 0.5 percent jump in the index for gasoline.
– Annual inflation gains speed –
Excluding food and fuel, however, the “core” CPI rose 0.2 percent for June
on higher costs for medical care, autos and recreation.
Costs for clothing, air fares and furniture fell.
For the last 12 months the CPI was 2.9 percent higher, the same as in May
which was the highest rate since February 2012.
And the core annual inflation rate was 2.3 percent higher compared to June
of last year, the largest gain since January 2017.
The Federal Reserve will keep a close eye on the rising price pressures.
The central bank is expected to raise benchmark lending rates twice more this
year, anticipating that years of steady growth and falling unemployment will
at long last drive inflation higher.
Ian Shepherdson of Pantheon Macroeconomics said the numbers showed
crosswinds, with energy services, apparel prices and hotel room rates falling
while medical services, autos, food and fuel rose.
The annual core rate will likely remain close to the current 2.3 percent in
the coming months, he wrote in a research note.
“The Fed is raising rates because of the risk that the tight labor market
will drive up inflation next year, not because the current picture or the
immediate outlook are alarming,” he said.
Meanwhile, a second Labor Department economic indicator showed inflation
eating into modest worker wage growth.
Inflation-adjusted hourly earnings were flat in June when compared with the
same month last year as Americans on average worked longer hours, the Labor
Department said.
BSS/AFP/HR/0950