June Inflation Higher Than Expected, Driven by Shelter
Spring’s brief lull in price pressure has faded. At 8:30 a.m. ET, the Bureau of Labor Statistics reported that headline CPI rose 0.3 percent in June and 2.7 percent year over year, up from May’s 2.4 percent pace and higher than the 2.6% consensus forecast. Core CPI—excluding food and energy—advanced 0.2 percent on the month and sits at 2.9 percent annually, still north of the Federal Reserve’s 2 percent target.
Shelter costs, up 0.2 percent in June and 3.8 percent over 12 months, once again did the heavy lifting, accounting for most of the monthly gain in core prices. The numbers mean tenants and would-be homeowners continue to face a stubborn housing crunch despite higher mortgage rates. Food prices climbed another 0.3 percent and are 3.0 percent higher than a year ago; eggs alone are up a remarkable 27.3 percent, and the broader meats-poultry-fish-and-eggs basket has risen 5.6 percent. Such figures sit uneasily with the cooling-inflation narrative now popular in official circles.
Energy delivered a mixed message. Gasoline ticked up 1.0 percent in June yet remains 8.3 percent cheaper than last summer, offering a modicum of relief at the pump. Electricity, by contrast, jumped 1.0 percent on the month and 5.8 percent year over year, while utility piped gas surged 14.2 percent from June 2024 levels. Those gains flowed into household furnishings and operations, which popped 1.0 percent, hinting that rising utility bills may offset any savings motorists enjoy.
The overall CPI-U now stands at 322.561 when indexed against 1982, meaning today’s dollar buys roughly 31 cents of Reagan-era purchasing power. The CPI-W index, used to adjust Social Security payments, is up 2.6 percent to 315.945. Looking ahead, the next inflation checkpoint arrives August 12, when July data will debut on a new December 2024 = 100 base, alongside revised methods for wireless-service pricing. Austrian-minded economists caution that methodological “improvements” are still ultimately arbitrary and often trim reported inflation, even as everyday costs keep climbing.
June’s hotter print, paired with unrelenting shelter and utility costs, shows the journey back to stable purchasing power is far from over. Whether the Fed tightens again or waits for the rebased index, markets appear to be voting with bullion. For households staring at pricier breakfasts and rising power bills, the official 2.7 percent headline may feel like wishful thinking.
