The prices of oil, gasoline, and petroleum by-products have fallen in the last 60 days, and the prices of commodities passed through to food companies and clothing retailers have risen. The government reports that consumer price activity seemed to split the difference. Overall consumer prices fell a seasonally adjusted .2% from May, the Labor Department reported. May showed a .2% increase over April.
A closer look shows that clothing and gas prices were not the story. Those costs, which include a 4.4% drop in energy costs, are backed out to show to show core inflation. The core figure, which excludes food and fuel, rose .3% –slightly more than Wall St. expected.
The data may offer a glimmer of light for the economy. Core inflation is often driven by consumer demand. Same-store sales in June were relatively strong. Car sales for the month were also better than expected. Unemployment rose, but the government’s figures so not include the last week of the month, so any jobs activity in recent weeks will not be captured until July data is released.
Overall, economists and the Administration have to be pleased.
Douglas A. McIntyre