Dawit Kebede

CUNA economics: Inflation eased in June

July 12, 2023

CUNA Senior Economist Dawit Kebede issued the following statement in response to the Labor Department’s June Consumer Price Index (CPI) Report:

“The headline inflation over the past 12 months decreased to 3% in June, down from 4% in May. The decline in prices for energy, used cars and trucks, and medical care services contributed to the slowdown. Energy prices decreased by 17% compared to June of the previous year. Core inflation, which excludes food and energy, increased by 4.8% over the past 12 months.

“Both the monthly headline and core prices also experienced a slowdown in June, with an increase of only 0.2%. This represents the smallest one-month increase in core prices in nearly two years. Air fares, communication costs, and used cars and trucks were among the items that saw price declines during the month. On the other hand, prices for shelter, motor vehicle insurance, and recreation showed increases. The index for shelter is gradually slowing down compared to previous months, but it still accounted for 70% of the monthly increase in headline inflation.

“The CPI report for June indicates that inflation is coming down. This includes prices for core services, excluding shelter, which the Federal Reserve closely monitors. It also suggests that the Federal Reserve Open Market Committee does not need to raise rates during their meeting this month.”