June 23, 2023

US consumer prices (CPI) rose +0.1% m/m in May, up +4.1% from a year ago (down from +5.0% y/y in April). This is down noticeably from a peak of +9.0% y/y last June.

Core CPI (excluding food and energy) also rose +0.4% m/m in May, up +5.3% from a year ago (down from +5.4% y/y in March). This is down from a peak of +6.7% y/y last September, but has persisted at a relatively high level so far this year.

US consumer food prices (CPI) rose +0.2% m/m in May, up +6.7% from a year ago. This is down from +7.6% y/y in April and a peak of +11.4% y/y last August.

US consumer energy prices (CPI) fell -3.6% m/m in May, down -11.3% from a year ago. However, they remain historically high.

As of June 19, average gasoline prices across the US stood at $3.58 per gallon, down -27.9% from a year ago. Gasoline prices reached a peak of $4.96 per gallon last June.

The US price of housing shelter (CPI) rose +0.6% m/m in May, up +8.0% from a year ago, down slightly from +8.2% y/y in March, which was its highest y/y rate since June 1982.

US producer prices (PPI – final demand) fell -0.3% m/m in May. This was up +1.2% from a year ago, down considerably from a peak of +11.7% y/y in March 2022. PPI is often seen as a (more volatile) leading indicator of the direction of consumer inflation, which suggests continued cooling.

The PCE (Personal Consumption Expenditures) price index, produced by the BEA, offers an alternative to the BLS’s CPI, one often preferred by the Federal Reserve. The PCE price index rose +0.4% m/m (an annualized rate of +4.5%) in April (latest available), up +4.4% from a year ago. That is down from a peak of +7.0% y/y last June, but up from +4.2% y/y in March.

Core PCE (excluding food and energy) rose +0.4% m/m in April, up +4.7% from a year ago. This is down from its peak of +5.4% y/y in February 2022, but up from +4.6% y/y in March.

The PCE price index rose at an annualized pace of +4.2% q/q in Q1, up from +3.7% in Q4. Note that these are q/q figures giving a snapshot of current price momentum, NOT y/y rates.

Core PCE (excluding food and energy) rose at a pace of +5.0% q/q in Q1, up from +4.4% in Q4. Both this and the headline PCE suggest that inflationary pressures is remains stubbornly persistent.

In terms of annual inflation rate, PCE for 2022 was up average of +6.2% from the prior year, compared to 2021 which was up an average of +4.0%. Core PCE for 2022 was up an average of +5.0% from the prior year, compared to 2021 which was up an average of +3.5%.