The price index, which is closely monitored by Chairman Jerome Powell of the US Federal Reserve Board (FRB), saw its slowest growth in a year and a half in June.
The services consumer price index (CPI), which excludes housing and energy, rose 4% in June from a year earlier, according to data released by the U.S. Bureau of Labor Statistics on Wednesday. It remained at the lowest growth since the end of 2021.
Service industry CPI excluding housing and energy
Source: U.S. Bureau of Labor Statistics, Bloomberg
The Federal Open Market Committee (FOMC) meeting on March 25-26 is widely expected to decide on a return to rate hikes. But weaker-than-expected growth in core services prices in June, along with other inflation indicators, could lead to a move away from further rate hikes at meetings after September.
US consumer price index rises 3% year-on-year in June, slower than expected (1)
“There are only early signs of disinflation,” Powell said at a news conference after the FOMC meeting in June. “As many analysts are likely to say, the key to lowering inflation in this sector is a continued loosening of labor market conditions,” he said.
The core services price index for June remained unchanged from the previous month. September 2021 was the last time it did not rise.
The same index, excluding medical care services, was unchanged from the previous month. The calculation of the index is highly consistent with the personal consumption expenditure (PCE) price index, which is the Fed’s official price target.
Original title:Powell’s Favored Services Inflation Gauge Hits Lowest Since 2021(excerpt)
2023-07-12 15:21:00
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