Consumer prices cool in June

As temperatures climbed for much of the country in June, prices saw a much-needed cooling. Following a 0.5% jump in May, consumer prices dropped 0.4% the Bureau of Labor Statistics reported this week, the largest one-month drop since April 2020. Prices rose 3.5% year over year, an improvement from last month’s 4.2% rate.

The month-over-month drop was fueled by lower energy prices, with core CPI, excluding food and energy costs, flat month over month.

The food index climbed 0.2% in June and 2.7% YoY. Food at home was also up 0.2%, with four of the six main grocery categories seeing price increases. Higher egg prices (up 4.3%) drove the meats, poultry, fish, and eggs index up 0.6%, while increases also hit dairy (+1.2%), cereals and bakery (+0.3%), and other food at home (+0.5%). Nonalcoholic beverages fell 1.5%, while fruits and vegetables dropped 0.2%.

Lettuce prices continued to soar, up 6.5% from May and 32.1% YoY—between price increases and a potential link to the cyclosporiasis outbreak, it’s a bad summer to be lettuce—but tomato prices cooled, down 10%.

Across other categories, apparel prices dropped 0.6% from May and rose 3.9% YoY, while personal care products prices increased 0.2% MoM and 2.7% YoY.

Numerator’s Consumer Good Price Index released this week, which uses receipt purchase data that accounts for promotions and discounts, found that prices for everyday household purchases—grocery, household goods, health and beauty—rose 0.7% in June.

“While lower gas prices provided some relief in June, the broader picture hasn’t changed: inflation continues to place the greatest strain on lower-income households,” Paul Stanley, senior economist at Numerator, said in a statement.

Looking ahead…The cooling trend might not last long, as the resumption of the US conflict with Iran this week could impact July prices. Industry group FMI–The Food Industry Association said in a statement following the release of the CPI data that there are “still significant uncertainties ahead” and said the news “serves as a reminder that global events can quickly ripple through the food supply chain.”