United States Inflation June 2018

United States

United States: Inflation reaches a near six-and-a-half year high in June

July 12, 2018

Consumer prices rose 0.1% from the previous month in June, down from May’s 0.2% increase. Higher prices in June, which were nevertheless lower than market analysts had expected, resulted from more expensive shelter, gasoline and food. On the other hand, cheaper gas and electricity weighed on consumer prices. Meanwhile, inflation accelerated to 2.9% from 2.8% in May, reaching the highest figure since February 2012.

Core consumer prices, which exclude volatile items including food and energy prices, rose 0.2% from the previous month in June, the same increase as in May and in line with market analysts’ expectations. Core prices were lifted by more expensive used cars and trucks, medical care and new vehicles. Cheaper apparel, however, dragged on prices. Core inflation was unchanged in June, remaining steady at May’s 2.2%. Core PCE inflation, the Federal Reserve’s preferred measure of inflation, is expected to have followed a similar dynamic in June.

With the headline reading reaching a new multi-year high in June, the current debate among Fed officials is likely to become more unanimous. By the end of September, the Federal Reserve is already expected by the majority of the panelists surveyed by FocusEconomics to deliver the third rate hike of the year, which would bring the federal funds rate to between 2.00% and 2.25%, up 25 basis points from current levels. The next FOMC meeting is set for 31 July–1 August.

United States Inflation Forecast


FocusEconomics Consensus Forecast participants expect inflation to average 2.5% in 2018, which is up 0.1 percentage points from last month’s forecast. For 2019, the panel expects inflation to average 2.2%.


Author:, Economist

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USA Inflation June 2018 2

Note: Year-on-year and month-on-month variation of seasonally-adjusted consumer price index in %.
Source: Bureau of Labor Statistics.


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