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Cost of Living

July 2017

Consumer Price Index (CPI)

Consumer prices in the United States increased 1.6 percent year-on-year in June of 2017 (Consumer Price Index for All Urban Consumers CPI-U), below 1.9 percent in May and compared to market expectations of 1.7 percent. For the month, the index increased 0.1 percent prior to seasonal adjustment. The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 1.5 percent over the last 12 months (Consumer Price Index for Urban Wage Earners and Clerical Workers). 

Core inflation rate for CPI-U, which excludes prices of food and energy, remained at a two-year low of 1.7 percent in June of 2017, the same as in May and in line with market expectations.

The current inflation rate is the lowest inflation rate since October of 2001. On a monthly basis, consumer prices were flat, following a 0.1 percent drop in May and compared to forecasts of 0.1 percent. Year to year changes in such items as food was 0.9% while energy was 2.3%, respectively (Consumer Price Index, selected categories). 

Overall, it appears that the rate of inflation (as measured by the CPI) is slowing down as compared to earlier year to year change in inflation – from January 2017 to April 2017 (see year to year changes). Looking forward, inflation is predicted to remain low in the near future.  According to the Survey of Professional Forecasters, the inflation rate is expected to average 2.3 percent in 2017 and 2018, and rise to 2.4 by 2019. Over the next 10 years, 2017 to 2026, inflation will average 2.3 percent.  

In comparison to the current unemployment rate the fear of high inflation due to wage pressure seems unwarranted. 

  

Seasonally adjusted Indexes May  2017  June 2017

Inflation Rate 

(Year to Year % Change )

CPI-W All Items Current Base

(1982-1984=100)

238.61 238.81 1.5

CPI-U All Items Current Base

(1982-1984=100)

248.85 243.79  1.6

 

 

Source:  U.S. Department of Labor, Bureau of Labor Statistics, Consumer Price Index Release

 

Updated 7/31/17 by IAM&AW Strategic Resources Department

The post Cost of Living appeared first on IAMAW.

Updated: August 3, 2017 — 10:36 am
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