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Low inflation, interest rates expected through 2021, says NAFCU
On a seasonally-adjusted basis, overall consumer prices rose 0.6 percent in June, the largest rise since August 2012. The Bureau of Labor Statistics reported that the overall consumer price index (CPI) grew 0.7 percent over the 12-month period.
“Energy prices drove the rise as gasoline prices rose 12.3 percent and energy commodities were up 11.7 percent. Airfares rose 2.6 percent after months of large declines,” said NAFCU Chief Economist and Vice President of Research Curt Long in a new Macro Data Flash report.
Energy prices rose 5.1 percent during the month of June, following a 1.8 percent decline in May. From a year ago, energy prices were down 12.5 percent. Food growth was up 0.6 percent in June and rose 4.5 percent on a year-over-year basis.
"Partial openings in some states have helped reverse disinflationary pressures, although it appears spiking virus cases will mark a return to closures, depressing the energy index once again," added Long. “Demand-side impacts to prices still dominate, and both inflation and interest rates should remain extremely low well into 2021.”
Core prices (excluding food and energy costs) rose 0.2 percent in June. Year-over-year core CPI growth was 1.2 percent.