CHICAGO — The most recent inflation reports from the U.S. Bureau of Labor Statistics show positive signs for the U.S. economy, as inflation cooled, and airfares dropped significantly in June. Both the Consumer Price Index (CPI) and Producer Price Index (PPI) had increases that were smaller than initially expected.
Some notable products and services are seeing less price inflation, including airfare, which dropped 8.1% in one month, and is down about 19% from last year’s prices. Gas prices are starting to decline slowly, and used cars saw prices drop 0.5% compared to May, according to the New York Times’ reporting.
The CPI rose 3% in the year through June, which is better than the 4% increase seen in the last CPI report for May. This is the smallest increase since March 2021, according to the Bureau’s data. Also, according to the Bureau, the CPI for all items less food and energy rose 0.2% in June, which is the smallest increase since August 2021.
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According to the PPI, which reports the measurement of inflation before it gets to consumers, final demand increased just 0.1% in June, seasonally adjusted, according to the Bureau. According to Reuters, this is the smallest year-on-year rise since August of 2020.
“The economy is still quite strong,” Dr. Peter Rupert, a Professor of Economics at the University of California at Santa Barbara who has spoken at Trade Show Executive’s Gold 100 and Fastest 50 Awards & Summit, said. “The labor market is as strong as ever. The CPI and PPI show that the Fed’s policy seems to be working in that inflation has been coming down. There is nothing in the current data that suggests a slowing down. The Fed is on track for another 25-basis point hike it seems, but the markets have priced that in already.”
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Reach Peter Rupert at peter.rupert@ucsb.edu
