This was just below the December value, which had given everyone a lot of hope back then, but was then followed by a series of increases. The three-month moving average of core CPI rose by 0.33% (blue line), after four monthly increases above 0.4%. On a month-to-month basis, core CPI increased by 0.16% in June, compared to 0.44% in May, after two monthly increases (red line in the chart below). This adjustment ends in September and might swing the other way (more in a moment).
But in the second half last year, the index slowed sharply, which will be the lower base going forward, providing for bigger year-over-year increases. The “base” for today’s year-over-year calculation is the surge of the index through June 2022. The infamous “base effect” will fade next month for the rest of the year.Energy prices can’t keep plunging forever in fact, they ticked up again on a monthly basis.But it’s getting tougher in the second half because, based on what we know already, no forecasting required:
