Depending upon the extent to which petroleum prices continue to rise and remain high, June could prove to have been the calm before the inflation storm.
On a seasonally adjusted basis, the U.S. Labor Department's consumer price index (CPI) rose two-tenths of a percent in June, half May's four-tenth's increase and the smallest monthly increase this year, save for February's one-tenth percent rise.
In June, the prices consumers pay for energy actually fell nine-tenths of a percent point, following a 2.4% increase in May and a 3.9% increase in April. But with prices for petroleum futures at or near record highs, it's unlikely that energy component of the CPI will post another significant decline anytime soon.
The so-called core CPI, which excludes price changes for food and fuel, increased three-tenths of a percent in June, its fourth consecutive monthly increase at that level. But what is concerning is that inflation, as measured by the core CPI, rose at a seasonally adjusted annual rate of 3.2% during the first six months of this year, compared with a 2.2% rise, a full percentage point lower, for all of 2005.