June’s inflation was broad-based. Here are the five things we learned from U.S. economic data released during the week ending July 15.
Consumer prices rose even faster in June. The Consumer Price Index jumped at a seasonally adjusted 1.3 percent pace during the month, up from a 1.0 percent bounce in May. CPI has risen 9.1 percent over the past year, a 41-year high for the Bureau of Labor Statistics measure. Leading the way was the 7.5 percent surge in energy prices (including an 11.2 percent increase at the gas pump). Food prices gained 1.0 percent and were 10.4 percent above year-ago levels. Net of energy and food, core CPI rose 0.7 percent and was 5.9 percent ahead of its June 2021 reading. Increasing were prices for transportation services (+2.1 percent), used cars/trucks (+1.6 percent), apparel (+0.8 percent), medical care services (+0.7 percent), new vehicles (+0.7 percent), shelter (+0.6 percent), and medical care commodities (+0.4 percent).
Wholesale prices also surged more quickly in June. The Producer Price Index (PPI) for final demand rose a seasonally adjusted 1.1 percent during the month, following a 0.9 percent advance in May. The Bureau of Labor Statistics’ core wholesale price measure, which removes energy, food, and trade services, increased by a more modest 0.3 percent. Final demand goods PPI swelled 2.4 percent as wholesale energy prices jumped 10.0 percent (including gas prices rising 18.5 percent). Food PPI had its smallest 2022 gain with a 0.1 percent advance. Services PPI increased 0.4 percent in June. Over the past year, PPI has risen a startling 11.3 percent (its biggest increase since the record reported in March), while the core measure has a 12-month comparable of +6.4 percent.
Retail sales rose in June. Retail and food services sales swelled 1.0 percent to a seasonally adjusted $680.6 billion. Sales were 8.4 percent above year-ago levels, with sales over the past three months 8.1 percent ahead of that from the same months in 2021. The Census Bureau measure does not adjust for price changes—hence, surging gas prices led to a 3.6 percent jump in sales at gas stations. After removing that and the 0.8 percent rise in sales at car dealers/parts stores, core retail sales gained 0.7 percent in June and were 6.6 percent ahead of their June 2021 levels. Sales rose at retailers focused on furniture (+1.4 percent), sporting goods/hobbies (+0.8 percent), groceries (+0.6 percent), and electronics/appliances (+0.4 percent), along with a 1.0 percent increase at restaurants/bars. Sales dropped at building materials stores (-0.9 percent), apparel retailers (-0.4 percent), and general merchandisers (-0.2 percent).
Manufacturing output slowed in June. The Federal Reserve reports that manufacturing sector output dropped a half percentage point during the month, matching its May decline. Production fell for both durable (-0.3 percent) and nondurable (-0.8 percent) goods, with the former hurt by sizable declines for primary metals, machinery, and motor vehicles. Manufacturing output remained 3.6 percent ahead of its year-ago pace. Manufacturing factory utilization dropped by a half percentage point to 79.3 percent. Overall industrial production dipped 0.2 percent in June but was 4.2 percent ahead of June 2021. Mining output jumped 1.7 percent (thanks to rises for oil and gas), while utility output decreased 1.4 percent.
Sentiment remained tepid in early July. The Index of Consumer Sentiment inched up 1.1 points to a seasonally adjusted reading of 51.1 (1966Q1=100). Even with the advance, the University of Michigan measure remained nearly at its all-time low. The current conditions index added 3.3 points to 57.1, while the expectations measure slipped by 2/10thsof a point to 47.3. The press release noted that survey respondents’ assessments of personal finances “continued to deteriorate” and were at their lowest point since 2011.
Other U.S. economic data released over the past week:
- Jobless Claims (Week ending July 9, 2022, First-Time Claims, seasonally adjusted): 244,000, +9,000 vs. the previous week, -168,000 vs. the same week a year earlier). 4-week moving average: 235,750 (-41.9% vs. the same week a year earlier).
- Import Prices (June 2022, All Imports, not seasonally adjusted): +0.2% vs. May 2022 +10.7% vs. June 2021. Nonfuel Imports: -0.5% vs. May 2022; +4.6% vs. June 2021.
- Export Prices (June 2022, All Exports, not seasonally adjusted): +0.7% vs. May 2022; +18.2% vs. June 2021. Nonagricultural Exports: +0.9% vs. May 2022; +18.7% vs. June 2021.
- Business Inventories (May 2022, Manufacturers’ and Trade Inventories, seasonally adjusted): $2.382 trillion (+1.4% vs. April 2022; +17.7% vs. May 2021).
- Monthly Treasury Statement (FY2022 Through June 2022, Budget Deficit): -$515.1 billion (-77.0% vs. First 9 Months of FY21).
- Beige Book
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