The Dept. of Labor reported today, June 12, that its Consumer Price Index (CPI) number for the last 12 months ending June fell to just 3.0%. This was before seasonal adjustment, but it shows inflation is on the decline.
So, inflation is definitely decelerating. In fact, six months ago, the prior 12 months' inflation for Jan. 2023 was 6.4%.
So, in 6 months, inflation is off over 50%. Falling from 6.4% to 3.0% means it is down 53% over the last 6 months (i.e., 3.4%/6.4%).
Why is this happening?
Lower Used Car and Energy Prices
The biggest contributors to this decline are lower used car, utility, and energy prices. For example, for the 12 months ending June 2023, used car prices are now negative 5.2%.
You can see this in the table above provided by the Dept. of Labor.
That doesn't mean that used car prices are rising more slowly. It means that dealers have been cutting their prices on average.
And look at energy prices. They are down 16.7% on average for the past 12 months. Most of that came from a 26.5% reduction in gasoline and an 18.6% cut in utility gas prices.
So, thanks to your local car dealer, utility, and gasoline dealer, inflation is now getting under control. C
But can this keep up?
That is highly dependent on external factors - OPEC, the war in Ukraine, the relative attractiveness of electric vs. ICE cars (internal combustion engine), and whether the supply and demand of oil and gas stay stable.
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