breaking news online news
By Heather Scott
US inflation surged to a fresh peak of 9.1 percent in June, further squeezing American families and heaping pressure on President Joe Biden, whose ratings have taken a battering from the relentless rise in prices. online news
Government data released Wednesday showed a sharp, faster-than-expected increase in the consumer price index from the previous month driven by significant increases in gasoline prices.
The 9.1 percent CPI spike over the past 12 months to June was the fastest increase since November 1981, the Labor Department reported.
Energy contributed half of the monthly increase, as gasoline jumped 11.2 percent in June and a staggering 59.9 percent over the past year. Overall energy prices posted their biggest annual increase since April 1980.
The war in Ukraine has pushed global energy and food prices higher, and US gas prices at the pump last month hit a record of more than $5 a gallon.
However, energy prices have eased in recent weeks, which could start to relieve some of the pressure on consumers.
But the Federal Reserve is likely to continue its aggressive interest rate increases as it tries to tamp down the price surge by cooling demand before inflation becomes entrenched.
The US central bank last month implemented the biggest rate hike in nearly 30 years, and economists say another three-quarter-point increase is likely later this month.
breaking news online news
Ian Shepherdson of Pantheon Macroeconomics summed up the data in one word: “Ouch.”
“This report will make for very uncomfortable reading at the Fed,” he said. “It rules out the chance of the Fed hiking by only 50bp this month.”
- Signs of cooling? –
Driven by record-high gasoline prices, the consumer price index jumped 1.3 percent in June.
But Shepherdson noted some signs of cooling prices in the data and predicted “this will be the last big increase.”
When volatile food and energy prices are stripped out of the calculation, “core” CPI increased 5.9 percent over the past year — still a rapid pace but slowing from the pace in May, according to the data.
Food and housing prices also rose in June, as did car prices, though the rate has stabilized or slowed from the past month, the report said.
The White House came out ahead of the report to predict it would show “highly elevated” inflation.
But press secretary Karine Jean-Pierre noted that the “backwards looking inflation data” does not take into account recent declines in gasoline prices.
According to AAA, the national average price at the pump was down to $4.63 a gallon, from $5.01 a month ago.
hs/to
© Agence France-Presse. All rights are reserved.
Notes from APS Radio News
During the past few years, a number of the world’s central banks have engaged in massive programs of monetary expansion, even as jobs and businesses were lost by way of virus-related restrictions and quarantines.
For example, beginning in March of 2020, the US Federal Reserve engaged in a substantially greater program of monetary expansion by purchasing hundreds of billions of dollars of Treasury and corporate bonds.
Since the early part of March 2020 to date, the Federal Reserve has added over $4 trillion to its holdings.
In particular, whereas on or about February 24, 2020, the holdings of the Federal Reserve stood at $4.2 trillion, on or about January 17, 2022, the holdings of the Federal Reserve stood at about $8.9 trillion.
As well, the Federal Reserve has kept interest rates low.
Recently, Jerome Powell, the head of the Federal Reserve, said that he wasn’t concerned about inflation and that, for the none, the Federal Reserve would keep interest rates at low levels.
Another examples is that of the Bank of Japan.
online news breaking news
According to Fred Economic Data, as of October 2021, the Bank of Japan’s holdings were about $6.4 trillion or about 725 trillion Yen.
In the early part of March 2020, the Bank of Japan’s holdings were $5.3 holdings. During the period mentioned, the Bank of Japan added over one trillion dollars to its holdings.
A number of corporations have been borrowing money inexpensively and have been purchasing their own shares of stocks, increasing share prices of stocks.
Still, there are concerns among investors.
A number of them have expressed concerns about central banks’ eventually increasing interest rates, as, during the past year, inflation levels have been increasing.
The combination of low interest rates, expansive monetary policies, fiscal stimulus programs, which themselves have infused trillions into the US economy, and shortages of goods and services caused by virus-related restrictions and lockdowns has increased levels of inflation.
Investors also have worried, for example, about announcements that were made by companies like Toyota and VW; months ago, those companies announced that because of shortages of particular types of material, they would be reducing levels of production.
Months ago, the results of a survey of UK manufacturers were released.
That survey indicated that many businesses in the UK were concerned about shortages of supplies.
In general, jobs and businesses have been lost by way of mandates, restrictions and quarantines, which, in their turn, were imposed by way of the virus narrative.
online news breaking news
In the US, overall, the mortality rate of the virus is about .069%, according to Statista, an award-winning service.
The recovery rate is over 99% for most age groups.
What has followed in the wake of lockdowns and mandates has been the infusion of trillions of dollars into the US economy, the increasing succeess of online businesses like Amazon and other large online retailers, various bank and tech-related stocks, the shuttering of small to medium-sized businesses and the loss of millions of jobs.
Another result has been the increasing levels of inflation, especially those of food and fuel.
In official terms, for purposes of reporting, the US Labor Department uses what is called “core inflation”.
Core inflation excludes items like food and fuel, as those are deemed too volatile.
breaking news online news
Please see below the full report issued earlier today. That report was disseminated by the US Bureau of Labor
Consumer Price Index Summary
Technical information: (202) 691-7000 * cpi_info@bls.gov * www.bls.gov/cpi
Media Contact: (202) 691-5902 * PressOffice@bls.gov
CONSUMER PRICE INDEX – JUNE 2022
The Consumer Price Index for All Urban Consumers (CPI-U) increased 1.3 percent in June on a
seasonally adjusted basis after rising 1.0 percent in May, the U.S. Bureau of Labor Statistics
reported today. Over the last 12 months, the all items index increased 9.1 percent before seasonal
adjustment.
online news breaking news
The increase was broad-based, with the indexes for gasoline, shelter, and food being the largest
contributors. The energy index rose 7.5 percent over the month and contributed nearly half of the
all items increase, with the gasoline index rising 11.2 percent and the other major component
indexes also rising. The food index rose 1.0 percent in June, as did the food at home index.
The index for all items less food and energy rose 0.7 percent in June, after increasing 0.6
percent in the preceding two months. While almost all major component indexes increased over the
month, the largest contributors were the indexes for shelter, used cars and trucks, medical care,
motor vehicle insurance, and new vehicles. The indexes for motor vehicle repair, apparel,
household furnishings and operations, and recreation also increased in June. Among the few major
component indexes to decline in June were lodging away from home and airline fares.
breaking news online news
The all items index increased 9.1 percent for the 12 months ending June, the largest 12-month
increase since the period ending November 1981. The all items less food and energy index rose 5.9
percent over the last 12 months. The energy index rose 41.6 percent over the last year, the
largest 12-month increase since the period ending April 1980. The food index increased 10.4
percent for the 12-months ending June, the largest 12-month increase since the period ending
February 1981.
Food
The food index increased 1.0 percent in June following a 1.2-percent increase the prior month. The
index for food at home also rose 1.0 percent in June, the sixth consecutive increase of at least
1.0 percent in that index. Five of the six major grocery store food group indexes rose in June.
The index for other food at home rose 1.8 percent, with sharp increases in the indexes for butter
and for sugar and sweets. The index for cereals and bakery products increased 2.1 percent in June,
with the index for flour rising 5.3 percent. The dairy and related products index rose 1.7 percent
over the month, following a 2.9-percent increase in May.
The fruits and vegetables index increased 0.7 percent in June after rising 0.6 percent in May. The
index for nonalcoholic beverages rose 0.8 percent over the month. The only major grocery group
index to decline in June was the index for meats, poultry, fish, and eggs which fell 0.4 percent
over the month as the indexes for beef and pork declined.
breaking news online news
The food away from home index rose 0.9 percent in June after rising 0.7 percent in May. The index
for full service meals rose 0.8 percent over the month. The index for limited service meals
increased 0.7 percent in June, as it did in May.
The food at home index rose 12.2 percent over the last 12 months, the largest 12-month increase
since the period ending April 1979. All six major grocery store food group indexes increased over
the span, with five of the six rising more than 10 percent. The index for other food at home
increased the most, rising 14.4 percent, with the index for butter and margarine increasing 26.3
percent. The remaining groups saw increases ranging from 8.1 percent (fruits and vegetables) to
13.8 percent (cereals and bakery products).
The index for food away from home rose 7.7 percent over the last year, the largest 12-month change
since the period ending November 1981. The index for full service meals rose 8.9 percent over the
last 12 months, and the index for limited service meals rose 7.4 percent over the last year.
Energy
The energy index increased 7.5 percent in June after rising 3.9 percent in May. The gasoline index
rose 11.2 percent in June after increasing 4.1 percent in May. (Before seasonal adjustment,
gasoline prices rose 9.9 percent in June.) The index for natural gas rose 8.2 percent in June, the
largest monthly increase since October 2005. The electricity index also increased in June,
rising 1.7 percent.
The energy index rose 41.6 percent over the past 12 months. The gasoline index increased 59.9
percent over the span, the largest 12-month increase in that index since March 1980. The index for
electricity rose 13.7 percent, the largest 12-month increase since the period ending April 2006.
The index for natural gas increased 38.4 percent over the last 12 months, the largest such
increase since the period ending October 2005.
All items less food and energy
The index for all items less food and energy rose 0.7 percent in June. The shelter index increased
0.6 percent in June, as it did in May. The rent index rose 0.8 percent over the month, the largest
monthly increase since April 1986, and the owners’ equivalent rent index rose 0.7 percent. The
index for lodging away from home fell 2.8 percent in June after a string of increases in recent
months.
The index for used cars and trucks rose 1.6 percent in June after rising 1.8 percent in May. The
motor vehicle insurance index increased 1.9 percent over the month, the sixth consecutive increase
in that index. The index for new vehicles rose in June, increasing 0.7 percent after rising 1.0
percent in May. The motor vehicle maintenance and repair index increased 2.0 percent in June, its
largest increase since September 1974.
online news breaking news
The medical care index rose 0.7 percent in June, with all medical care component indexes
increasing over the month. The index for dental services increased 1.9 percent in June, the
largest monthly change ever recorded for that series, which dates to 1995. The hospital services
index increased 0.3 percent over the month, while the physicians’ services index rose 0.1 percent.
The index for prescription drugs also increased 0.1 percent in June.
online news breaking news
The apparel index rose 0.8 percent in June, following a 0.7-percent increase in May. The index for
household furnishings and operations continued to rise, increasing 0.4 percent over the month. The
recreation index rose 0.3 percent in June. Other indexes that increased in June include education
(+0.4 percent), personal care (+0.4 percent), alcoholic beverages (+0.4 percent), and tobacco (+0.6
percent).
Among the limited number of indexes which declined in June was the index for airline fares, which
fell 1.8 percent in June after rising sharply in recent months. The communication index was
unchanged over the month.
The index for all items less food and energy rose 5.9 percent over the past 12 months. The
increase was broad-based, reflecting advances in almost all major component indexes. The shelter
index rose 5.6 percent over the last year, the largest 12-month increase since the period ending
February 1991. The index for household furnishings and operations increased 9.5 percent over the
last 12 months. The index for new vehicles rose 11.4 percent and the index for used cars and
trucks increased 7.1 percent over the year, while the index for airline fares rose 34.1 percent.
Not seasonally adjusted CPI measures
The Consumer Price Index for All Urban Consumers (CPI-U) increased 9.1 percent over the last 12
months to an index level of 296.311 (1982-84=100). For the month, the index increased 1.4 percent
prior to seasonal adjustment.
breaking news online news
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 9.8 percent
over the last 12 months to an index level of 292.542 (1982-84=100). For the month, the index rose
1.6 percent prior to seasonal adjustment.
The Chained Consumer Price Index for All Urban Consumers (C-CPI-U) increased 8.4 percent over the
last 12 months. For the month, the index increased 1.2 percent on a not seasonally adjusted basis.
Please note that the indexes for the past 10 to 12 months are subject to revision.
The Consumer Price Index for July 2022 is scheduled to be released on Wednesday, August 10, 2022
at 8:30 a.m. (ET).
Technical Note
Brief Explanation of the CPI
The Consumer Price Index (CPI) measures the change in prices paid by consumers for goods
and services. The CPI reflects spending patterns for each of two population groups: all
urban consumers and urban wage earners and clerical workers. The all urban consumer group
represents about 93 percent of the total U.S. population. It is based on the expenditures
of almost all residents of urban or metropolitan areas, including professionals, the self
-employed, the poor, the unemployed, and retired people, as well as urban wage earners
and clerical workers. Not included in the CPI are the spending patterns of people living
in rural nonmetropolitan areas, farming families, people in the Armed Forces, and those
in institutions, such as prisons and mental hospitals. Consumer inflation for all urban
consumers is measured by two indexes, namely, the Consumer Price Index for All Urban
Consumers (CPI-U) and the Chained Consumer Price Index for All Urban Consumers (C-CPI-U).
The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is based on
the expenditures of households included in the CPI-U definition that meet two requirements:
more than one-half of the household’s income must come from clerical or wage occupations,
and at least one of the household’s earners must have been employed for at least 37 weeks
during the previous 12 months. The CPI-W population represents about 29 percent of the
total U.S. population and is a subset of the CPI-U population.
The CPIs are based on prices of food, clothing, shelter, fuels, transportation, doctors’
and dentists’ services, drugs, and other goods and services that people buy for day-to-day
living. Prices are collected each month in 75 urban areas across the country from about
6,000 housing units and approximately 22,000 retail establishments (department stores,
supermarkets, hospitals, filling stations, and other types of stores and service
establishments). All taxes directly associated with the purchase and use of items are
included in the index. Prices of fuels and a few other items are obtained every month in
all 75 locations. Prices of most other commodities and services are collected every month
in the three largest geographic areas and every other month in other areas. Prices of most
goods and services are obtained by personal visit, telephone call, or web collection by the
Bureau’s trained representatives.
breaking news online news
In calculating the index, price changes for the various items in each location are
aggregated using weights, which represent their importance in the spending of the
appropriate population group. Local data are then combined to obtain a U.S. city average.
For the CPI-U and CPI-W, separate indexes are also published by size of city, by region of
the country, for cross-classifications of regions and population-size classes, and for 23
selected local areas. Area indexes do not measure differences in the level of prices among
cities; they only measure the average change in prices for each area since the base period.
For the C-CPI-U, data are issued only at the national level. The CPI-U and CPI-W are
considered final when released, but the C-CPI-U is issued in preliminary form and subject
to three subsequent quarterly revisions.
The index measures price change from a designed reference date. For most of the CPI-U and
the CPI-W, the reference base is 1982-84 equals 100. The reference base for the C-CPI-U is
December 1999 equals 100. An increase of 7 percent from the reference base, for example,
is shown as 107.000. Alternatively, that relationship can also be expressed as the price
of a base period market basket of goods and services rising from $100 to $107.
Sampling Error in the CPI
The CPI is a statistical estimate that is subject to sampling error because it is based
upon a sample of retail prices and not the complete universe of all prices. BLS calculates
and publishes estimates of the 1-month, 2-month, 6-month, and 12-month percent change
standard errors annually for the CPI-U. These standard error estimates can be used to
construct confidence intervals for hypothesis testing. For example, the estimated standard
error of the 1-month percent change is 0.03 percent for the U.S. all items CPI. This means
that if we repeatedly sample from the universe of all retail prices using the same
methodology, and estimate a percentage change for each sample, then 95 percent of these
estimates will be within 0.06 percent of the 1-month percentage change based on all retail
prices. For example, for a 1-month change of 0.2 percent in the all items CPI-U, we are 95
percent confident that the actual percent change based on all retail prices would fall
between 0.14 and 0.26 percent. For the latest data, including information on how to use
the estimates of standard error, see www.bls.gov/cpi/tables/variance-estimates/home.htm.
Calculating Index Changes
Movements of the indexes from 1 month to another are usually expressed as percent changes
rather than changes in index points, because index point changes are affected by the level
of the index in relation to its base period, while percent changes are not. The following
table shows an example of using index values to calculate percent changes:
The Consumer Price Index (CPI) produces both unadjusted and seasonally adjusted data.
Seasonally adjusted data are computed using seasonal factors derived by the X-13ARIMA-SEATS
seasonal adjustment method. These factors are updated each February, and the new factors are
used to revise the previous 5 years of seasonally adjusted data. The factors are available
at www.bls.gov/cpi/tables/seasonal-adjustment/seasonal-factors-2022.xlsx. For more
information on data revision scheduling, please see the Factsheet on Seasonal Adjustment at
www.bls.gov/cpi/seasonal-adjustment/questions-and-answers.htm and the Timeline of Seasonal
Adjustment Methodological Changes at
www.bls.gov/cpi/seasonal-adjustment/timeline-seasonal-adjustment-methodology-changes.htm.
breaking news online news
For analyzing short-term price trends in the economy, seasonally adjusted changes are usually
preferred since they eliminate the effect of changes that normally occur at the same time and
in about the same magnitude every year-such as price movements resulting from weather events,
production cycles, model changeovers, holidays, and sales. This allows data users to focus on
changes that are not typical for the time of year. The unadjusted data are of primary interest
to consumers concerned about the prices they actually pay. Unadjusted data are also used
extensively for escalation purposes. Many collective bargaining contract agreements and pension
plans, for example, tie compensation changes to the Consumer Price Index before adjustment for
seasonal variation. BLS advises against the use of seasonally adjusted data in escalation
agreements because seasonally adjusted series are revised annually.
Intervention Analysis
The Bureau of Labor Statistics uses intervention analysis seasonal adjustment (IASA) for some
CPI series. Sometimes extreme values or sharp movements can distort the underlying seasonal
pattern of price change. Intervention analysis seasonal adjustment is a process by which the
distortions caused by such unusual events are estimated and removed from the data prior to
calculation of seasonal factors. The resulting seasonal factors, which more accurately represent
the seasonal pattern, are then applied to the unadjusted data.
online news breaking news
For example, this procedure was used for the motor fuel series to offset the effects of the 2009
return to normal pricing after the worldwide economic downturn in 2008. Retaining this outlier
data during seasonal factor calculation would distort the computation of the seasonal portion
of the time series data for motor fuel, so it was estimated and removed from the data prior to
seasonal adjustment. Following that, seasonal factors were calculated based on this “prior
adjusted” data. These seasonal factors represent a clearer picture of the seasonal pattern in
the data. The last step is for motor fuel seasonal factors to be applied to the unadjusted data.
For the seasonal factors introduced for January 2022, BLS adjusted 72 series using intervention
analysis seasonal adjustment, including selected food and beverage items, motor fuels, electricity,
and vehicles.
Revision of Seasonally Adjusted Indexes
Seasonally adjusted data, including the U.S. city average all items index levels, are subject to
revision for up to 5 years after their original release. Every year, economists in the CPI
calculate new seasonal factors for seasonally adjusted series and apply them to the last 5 years
of data. Seasonally adjusted indexes beyond the last 5 years of data are considered to be final
and not subject to revision. For January 2022, revised seasonal factors and seasonally adjusted
indexes for 2017 to 2021 were calculated and published. For series which are directly adjusted
using the Census X-13ARIMA-SEATS seasonal adjustment software, the seasonal factors for 2021 will
be applied to data for 2022 to produce the seasonally adjusted 2022 indexes. Series which are
indirectly seasonally adjusted by summing seasonally adjusted component series have seasonal
factors which are derived and are therefore not available in advance.
Determining Seasonal Status
Each year the seasonal status of every series is reevaluated based upon certain statistical
criteria. Using these criteria, BLS economists determine whether a series should change its
status from “not seasonally adjusted” to “seasonally adjusted”, or vice versa. If any of the 81
components of the U.S. city average all items index change their seasonal adjustment status from
seasonally adjusted to not seasonally adjusted, not seasonally adjusted data will be used in the
aggregation of the dependent series for the last 5 years, but the seasonally adjusted indexes
before that period will not be changed. For 2022, 22 of the 81 components of the U.S. city
average all items index are seasonally adjusted.
Contact Information
For additional information about the CPI visit www.bls.gov/cpi or contact the CPI Information and
Analysis Section at 202-691-7000 or cpi_info@bls.gov.
For additional information on seasonal adjustment in the CPI visit
www.bls.gov/cpi/seasonal-adjustment/home.htm or contact the CPI seasonal adjustment section at
202-691-6968 or cpiseas@bls.gov.