Consumer price index slides to 3.5%, core inflation remains high

The Consumer Price Index (CPI) came in at 3.5% in June compared to a year ago, better than the 3.8% forecast by economists, according to Tuesday’s (July 14) report from the U.S. Bureau of Labor Statistics (BLS). However, prices remain elevated for many households.

Core inflation, which strips out food and energy costs, increased 2.6% from a year ago and was flat against May results, according to the BLS report.

There was some easing in energy and select service prices, while grocery prices were up 2.7%, slightly lower than in recent months. Food prices overall were up 3% from a year ago, and while that number is down from pandemic highs, it’s still well above the Federal Open Market Committee’s target of 2.5%.

Cereal and bakery products were 3% more expensive than a year ago and slightly higher than in May. In the meat category, beef prices were up 11.2%. Ground beef prices rose 12.4%. Roasts and other muscle cuts of beef increased between 11.4% and 13.8% from a year ago.

Consumers saw some relief in bacon prices, which were down 1.5% from a year ago. But ham costs increased 5.6% along with pork chops. Even hot dog wieners are 7.2% more expensive than a year ago. Chicken prices have declined amid excess supplies. Fresh and frozen chicken is 2.3% cheaper than a year ago overall. Turkey prices are 8.6% higher year over year. Fish and seafood prices averaged 6.3% more expensive than a year ago in June.

Egg prices are down 27.9% year over year, but milk prices are up between 6.6% and 9%, depending on the fat content. Other dairy products like ice cream and cheese are either cheaper than a year ago or about the same price, according to the report.

Fresh fruits and vegetable prices averaged 5.7% price increases across the categories. Apples were 7.1%  more expensive, with banana prices rising just 1%. Fresh vegetable prices rose 9.9% on average amid higher costs for fertilizer and seeds. Lettuce is 32% more expensive than a year ago, and tomatoes are 19.5% more costly. Other fresh vegetables averaged 6.4% more expensive than a year ago in June. Canned fruit and vegetable prices rose 7.9% and 3.5%, respectively.

Soda prices increased 1.9%. with non-carbonated juices and drink prices up 5.5% from a year ago. Coffee prices increased 12.9% in June, compared to a year ago. Candy and chewing gum prices are up 9.6% from a year ago.

The cost for services eased in June, with prices, excluding energy, being flat for the month and up 3.2% from a year ago. Cost for services were up 3.5% in May. Overall, costs of services from personal to business were higher year over year.

Medical care services were up 2.9% in June, doctor’s office services increased 2.4%, and hospital services were 5.1% more expensive year over year. Dental care services costs increased 7% in June.

Education services were 2.5% more expensive in June than a year ago. Pet services increased 3.2% in June, and personal care services were up 4.2% from a year ago.

Transportation services were helped by a 4.1% decrease in the cost of automobile insurance from a year ago. Gasoline prices were 26.7% more expensive than a year ago, but prices declined from May’s 36.4% increase. Vehicle repair services were 7% more expensive in June amid higher parts and labor costs. Airfares were 26.5% more expensive in June than a year ago thanks to higher fuel costs and less overall capacity.

Energy costs for utilities are trending higher, with electricity costs up 4% in June, and natural gas prices 3% more expensive than a year ago. Shelter costs rose 3.3% overall from a year ago. Rents came in 2.8% more expensive and mortgage, taxes and insurance costs for owners were up 3.3% year over year. Hotel rates increased 4.9% in June compared to a year ago.