The July Consumer Price Index for Urban Consumers (CPI-U) released this morning puts the June year-over-year inflation rate at 2.07%, fractionally off last month's 2.13% 19-month high, but well below the 3.88% average since the end of the Second World War and 13% below its 10-year moving average.
For a comparison of headline inflation with core inflation, which is based on the CPI excluding food and energy, see this monthly feature.
For better understanding of how CPI is measured and how it impacts your household, see my Inside Look at CPI components.
For an even closer look at how the components are behaving, see this X-Ray View of the data for the past six months.
The Bureau of Labor Statistics (BLS) has compiled CPI data since 1913, and numbers are conveniently available from the FRED repository (here). My long-term inflation charts reach back to 1872 by adding
Tuesday's CPI report for the month of June showed that overall price levels increased 0.3% relative to May. While the fractional increases we typically see in each month's CPI report seem like small moves, over time they add up. For example, over the last eight years the overall level of consumer prices has increased by nearly 18%. And that's just the official government figures. Talk to some people and they'll tell you the actual rate of inflation is much higher.
Using the official figures from the CPI, the table above breaks out the change in prices for each of the eight major sectors in the report. For each sector, we also include the sector's weight in the overall CPI, its percentage change since June 2006, and its contribution to the total increase in CPI. As shown, the sector that has seen the largest increase in prices has been Medical Care,
In real, population-adjusted terms, Retail Sales are at the level we first reached in September 2004.
Last week the Advance Retail Sales Report showed that sales in June rose 0.2% month-over-month and 4.2% year-over-year, as I reported in my real-time update.
With today's release of the Consumer Price Index, we can now dig a bit deeper into the "real" data, adjusted for inflation and against the backdrop of our growing population.
The first chart shows the complete series from 1992, when the U.S. Census Bureau began tracking the data in its current format. I've highlighted recessions and the approximate range of two major economic episodes.
The Tech Crash that began in the spring of 2000 had relatively little impact on consumption. The Financial Crisis of 2008 has had a major impact. After the cliff-dive of the Great Recession, the recovery in retail sales has taken us (in nominal terms)