Economists generally believe the headline year-over-year number will top the 8.6 percent figure reported for May, with the Federal Reserve Bank of Cleveland’s model predicting inflation hitting nearly 8.7 percent last month, for example. The monthly rise is expected to be similar to June’s at 1 percent.
But core CPI, excluding food and energy, is expected to decline from 6 percent over the previous 12 months to something in the 5.7 percent ballpark. And since June, the monthly rise is expected to come in around 0.5 percent, down slightly from a month earlier.
Economists — including at the Fed, although they use a different measurement, the personal consumption expenditures price index — typically look to core inflation for underlying signs of price shifts since food and energy costs are tied to global commodity markets and aren’t necessarily impacted by Fed policy.
But grocery bills and prices at the pump are among those most visible to consumers. And despite the recent decline in gasoline prices, there are signs that it may not last.
“But we’re not completely out of the woods yet — we could also see a sharp reversal in the decline,” Patrick De Haan, head of petroleum analysis at GasBuddy, which tracks retail motor fuel costs, wrote in a blog post this week. “There remains the risk of a spike in prices that could send us to new record levels in August, should any disruptions occur.”