The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.6% in June on a seasonally adjusted basis, rebounding after a 0.1% decrease in May, the Bureau of Labor and Statistics said in a Tuesday report.
What Happened: After months of a falling CPI, June saw the largest increase over the past year.
Gasoline grew a massive 12.3% and the energy index increased by 5.3%.
For consumers, the food index for food at home also increased .6%.
The CPI measures the change in prices paid by consumers for goods and services. The CPI reflects spending patterns for each of two population groups: all urban consumers and urban wage earners and clerical workers.
Why It’s Important: For producers, prices going up is good for business and can mean that demand is increasing for certain goods — but also can mean that some goods are harder to come by.
In the last year, beef has seen an index price increase of over 25.1%.
Index increases in other areas signal a return of some services and spending on certain goods, which shows at least some increase in economic activity.
The index for all items less food and energy increased 0.2% in June, with services such as auto insurance and physician services also seeing increases after months of decreases.
Other notable changes include airfare increasing 2.6% and the used cars index decreasing another 1.2%, making three straight months of decreases.
What’s Next: With some states experiencing a second wave of shutdowns in July and other states entering a first shutdown, don’t expect these increases to continue. Economists will look for necessities to increase in price partially as a result of supply chain issues in industries like food.
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