AIER Everyday Price Index Up 2.4% In June

AIER daily price rose 2.4% in June after jumping 2.1% in May. In the first six months of 2022, the EPI rose 22.6 percent year on year. Compared to last year, the everyday price index rose by 14.6%, the second straight record since 1987.

Price increases continue to be broadly broad, with 18 components up from five declines, and one component unchanged in June. Motor fuel prices, which are often a major contributor to monthly changes in the everyday price index due to the heavy weight in the index and the volatility of the underlying commodity, drove prices up 9.8% MoM (not seasonally adjusted), resulting in monthly gain was 135 basis points.

Household fuels and utilities were the second largest contributor in June, adding 53 basis points, followed by a 25 basis point contribution from eating at home and a 14 basis point contribution from eating out (restaurants). The remaining contributions were three base points or less. However, significant price increases were seen in reading materials (3.1 percent), hospital admissions (1.7 percent), household supplies (1.2 percent), over-the-counter drugs (1.2 percent) and pets and health care products. them (1.0 percent).

The Clothing Everyday Price Index, a broader measure that includes clothing and footwear, rose 2.2% in June after rising 2.0% in May. In the first six months of 2022, the EPI index, including apparel, is up 21.7% year on year. Over the past year, the everyday price index, including clothing, has risen by 13.9%, which is also the second consecutive record high since 1987.

Clothing prices fell 0.3% seasonally in June. Clothing prices tend to change from month to month. Compared to last year, clothing prices increased by 5.2 percent.

The consumer price index, which includes day-to-day purchases as well as infrequently purchased, high-value and fixed-contract goods, rose 1.4% seasonally in June. Energy accounted for almost half of the increase in June. Over the past year, the consumer price index has risen 9.1 percent, the fastest pace since November 1981.

The consumer price index, excluding food and energy, rose 0.7% MoM (not seasonally adjusted), while the 12-month change was 5.9%, the third consecutive slowdown after hitting 6.5% in March. The 12-month change in the core CPI was just 1.3 percent in February 2021 and 2.3 percent in January 2020, before the pandemic.

The seasonally adjusted consumer price index rose 1.3% in June, while the base index rose 0.7% MoM. At the core, prices for basic commodities rose 0.8% in June and rose 7.2% year-over-year. Significant monthly growth was seen in used cars and trucks (1.6%), pet food (1.3%), furniture and bedding (1.1%), new trucks (0.8%) and new cars (0.5%).

Prices for basic services rose 0.7% mom and 5.5% year-over-year. Among the main services increased: health insurance (an increase of 2.1% and 17.3% compared to last year), car repair (2.0% and 7.9% compared to last year), motor vehicle insurance (an increase by 1.9% for the month and 6.0% compared to the previous year). a year ago), health care (up 0.7% m/m and 4.8% y/y) and owner-equivalent rent (which is 23.7% of CPI, up 0.7% m/m and 5.5% per year). back).

Among the few major indices that declined in June were home away from home (-2.8% in June, but still up 10.0% from a year ago) and airfare (-1.8%, but by 34.1% more than a year ago).

Pricing pressures on many goods and services in the economy remain elevated due to shortages of supplies and materials, problems with logistics and supply chains, and labor shortages and employee turnover. Sustained higher price increases are likely to distort economic activity, influencing consumer and business decisions. In addition, price pressure has led to an intensification of the Fed’s tightening cycle, which has increased the risk of policy error. In addition, the consequences of the Russian invasion of Ukraine disrupt global supply chains. All this supports a high level of uncertainty in the economic outlook. The caution is justified.

Robert Hughes

Bob Hughes

Robert Hughes joined AIER in 2013 after over 25 years of economic and financial market research on Wall Street. Bob previously led the Global Equity Strategy division of Brown Brothers Harriman, where he developed an equity investment strategy that combines macro downside analysis with upside fundamentals.

Prior to joining BBH, Bob was Senior Equity Strategist at State Street Global Markets, Senior Economic Strategist at Prudential Equity Group, and Senior Economist and Financial Markets Analyst at Citicorp Investment Services. Bob holds an MA in Economics from Fordham University and a BA in Business from Lehigh University.

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