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Tuesday, July 14, 2020 - 09:37

MNI DATA REACT: US June CPI Jumps 0.6%; Core Up 0.2%


--CPI +0.6% yoy; Core CPI +1.2% yoy
--Energy +5.1%; Food +0.6%

WASHINGTON (MNI) - The U.S. consumer price index rose by a stronger-than-expected 0.6% in June as gasoline and apparel prices surged, offsetting weakness in used vehicle prices, the Bureau of Labor Statistics said Tuesday. It was the first price rise since the Covid-19 pandemic hit in March and reflects a restart of economic activity in many parts of the country last month.

Energy prices rose for the first time since December, increasing by 5.1%, the largest single-month gain in more than a decade. That was primarily driven by gasoline prices, which jumped by 12.3%, the first monthly increase in several months.

Food price inflation slowed slightly in June, though the price index still remained at a record-high, rising by 0.6% following a 0.7% gain in May. Food at home prices rose by 0.7% in June after increasing by 1.0% in May. Meat prices in particular have been rising.

Excluding food and energy prices, CPI was up 0.2%, also stronger than market expectations for a 0.1% gain.

--CORE STRENGTH

Apparel prices grew by 1.7%, the most in nearly two decades, according to the St. Louis Fed, offsetting weakness from used vehicle prices, which slipped by 1.2% in June following a 0.4% drop in May. New vehicle prices were flat in June.

The relatively large owners' equivalent rent category, accounting for 24% of the total CPI basket, increased 0.1% in June, slowing from a 0.3% gain in May.

Medical care prices also slowed, rising by 0.5% in June after increasing 0.6% in May. That was primarily driven by a 0.4% gain in hospital services prices.

Airfares and hotel rates rebounded after falling sharply over the past three months as travel started to resume.

The BLS said CPI data collection in June was hampered by temporary business closures and limited operations of certain types of establishments, which resulted in "an increase in the number of prices considered temporarily unavailable." A small number of indexes typically published each month were not published in June because of the Covid-19 pandemic, the BLS said.

Data collection by personal visit has been suspended since mid-March.

--MNI Washington Bureau; +1 202 371 2121; email: brooke.migdon@marketnews.com

[TOPICS: MAUDS$,M$U$$$]

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