June US consumer prices inch up, inflation tame

Thursday, July 11, 2019

Americans paid more for rent, clothes and autos in June, but consumer inflation was largely held in check by falling energy prices. Waning inflation is one of the chief reasons the Federal Reserve is likely to cut interest rates by the end of the month.

The consumer price index iched up by 0.1 percent in June,the government said. Economists polled by MarketWatch had forecast no change.

The increase in the cost of living over the past 12 months slipped to four-month low 1.6 percent from 1.8 percent.

Another closely watched measure of inflation, however, was not as tame. The so-called core rate that strips out food and energy jumped 0.3 percent last month, marking the biggest increase in a year and a half. Higher rents were a big contributor.

The 12-month increase in the core rate edged up to 2.1 percent from 2 percent.

The cost of gasoline, electricity and natural gas all declined last month to keep a lid on inflation. The average cost of a regular gallon of gas  in the US, for instance, fell to US$2.65 in June from US$2.82 at the end of May.

Food prices were flat.

Yet prices rose for a variety of consumers staples such as rent, apparel, used vehicles, medical care, household furnishings and gardening and lawncare services.

Some of these prices pressures are unlikely to persist, however. The increase in household furnishings, perhaps a byproduct of U.S. tariffs on China, was the largest in 28 years. And clothes prices are still lower now than they were one year ago.