July 13, 2023

Inflation downtrend continues in June

data flash chart

On a seasonally-adjusted basis, overall consumer prices rose 0.2 percent in June, with the overall consumer price index (CPI) rising 3.1 percent year-over-year. NAFCU Economist Noah Yosif breaks down the data in a new Macro Data Flash report.

“Inflation continued to decline in June, with a significant downshift in core CPI,” said Yosif. “This decline was driven by housing, via falling rents, as well as used vehicle prices, which take time to respond to monetary policy, and will see further improvement as interest rates remain elevated. The improvement in consumer spending power could spark a reacceleration in inflation down the road, however; the decline in core inflation allows the Fed to be patient.”

Core prices (excluding food and energy costs) rose 0.2 percent last month. Year-over-year core CPI growth was 4.9 percent. Energy prices decreased 0.6 percent during the month. From a year ago, energy prices were down 16.5 percent. Food prices declined in June and were up 5.7 percent over the year.

NAFCU anticipates that another report similar to this one will provide the dovish segment of the FOMC with plenty of support to argue for no further increases to the fed funds rate in the current cycle after the upcoming July hike," Yosif concluded.

For more up-to-date economic insights from NAFCU's award-winning research team, view NAFCU’s Macro Data Flash reports.