Washington, DC, July 19, 2006--According to a Labor Department announcement, the consumer price index increased 0.2% in June, for its smallest gain in four months. The core rate, which excludes food and energy, rose 0.3% for the fourth straight month.
In June the consumer price index increased 0.2% in June after rising 0.4% in May. Energy prices fell 0.9%, while food prices rose 0.3%.
The CPI increased at a 5.1% annual rate in the second quarter and is up 4.3% in the past 12 months, matching the biggest gain since last October. The core CPI increased at a 3.6% annual rate in the second quarter and is up 2.6% in the past year, a bit more than the Fed would like. It's the fastest increase in core inflation since December 2001.
The major factor driving higher inflation was the cost of shelter, which represents more than 30% of the CPI. Residential rents rose 0.4%, while owners' equivalent rent also increased 0.4%.
Economists were expecting 0.2% gains in both the headline CPI and the core CPI.
Inflationary pressures abated in most categories in June. Energy costs fell, but that was only temporary, we know, as gasoline prices have risen since then.
Apparel costs were flat after rising 1.8% in the past three months.
Medical costs rose 0.3%, matching May's increase.
Transportation costs fell 0.2%, on lower fuel costs. New vehicle prices fell 0.1%, while airfares rose 3.1%.
Tobacco prices rose 0.8% in June, the biggest gain in a year
