Page 1

• •

U.S. • Internationa l Log In Log Out CNN


• Home • Video • Business News • Markets

My Portfolio

• Investing • Economy • Tech • Personal Finance

• Small Business • Leadership • • • • • • • •

Federal Reserve Jobs World The Buzz America's Debt Challenge #YourEconomy


Prices climb in June, but annual inflation still tame By Annalyn Kurtz @AnnalynKurtz July 16, 2013: 9:22 AM ET

The Consumer Price Index, a key measure of inflation, rose 0.5% in June, but remained low over the last 12 months.


Prices for groceries and clothing and other goods all increased in June, but inflation remains below 2% a year. The Consumer Price Index, a key measure of inflation, rose 0.5% over the month, according to the Labor Department. That was the largest monthly increase since February, and came as a surprise to economists, who predicted the report would show inflation accelerated 0.3% in June.

Still, other indicators show inflation remains tame over the long run. Compared to a year earlier, prices are up only 1.8%, a level that's considered low and consistent with a slowgrowing economy. "Inflation signs we're seeing don't point to some sort of hyperinflation, but it does suggest there are normal inflationary pressures in the economy which may be a sign of further recovery," said Steve Cunningham, director of research and education at the American Institute for Economic Research. "As long as it's well contained, there's no fear of a bigger problem." Stripping out volatile gas and food prices shows core inflation was up only 1.6% over the last 12 months, the smallest annual change since June 2011. This level is consistent with another key measure of inflation, watched closely by the Federal Reserve, which shows core inflation has been around 1% recently. The central bank aims to keep inflation around 2% over the long-term. The Fed has been falling well below that target this year, but if signs point to an acceleration in inflation in the future, that could give the central bank more reason to start slowing its stimulus program later this year. Related: 'About half' of Fed officials expect QE3 to end this year The current policy entails buying $85 billion a month in Treasuries and mortgage-backed securities, in an effort to lower long-term interest rates. Talk has turned to when the Fed should start to reduce the pace of those purchases, and eventually end the program completely. "The Fed has been so aggressive in its expansionary policy, and people are concerned that will ultimately manifest in an uncomfortably high inflation rate," Cunningham said. "As we see signs of inflation picking up, that makes it more likely the Fed will start to take a less aggressive stance."

First Published: July 16, 2013: 8:52 AM ET

Join the Conversation

Most Popular Stocks higher after Nasdaq's 3-hour halt More trouble ahead for emerging markets Europe's recovery gaining momentum Picking a college major in the fall? Don't choose business. Microsoft's 45-inch touchscreen costs $150

Mortgage & Savings Center • Mortgages • Insurance • Credit Cards • CDs Overnight Avg Rate


Chang Last Week e

30 yr fixed



15 yr fixed



5/1 ARM



30 yr refi



15 yr refi



Find the best auto, life, home, health rates Enter Zip code: ZIP code

Select a product: Auto

Insurance news and resources from BankRate • • • •

States split on Medicaid's role in Obamacare Who's expanding Medicaid under Obamacare? Does life insurance cover prison inmates? 6 ways to bungle an insurance claim after disaster

View rates in your area Enter ZIP code

Find personalized rates: Card type Credit type Card issuer Rate data provided by Today's featured rates: • • • • • • • • • • • • • • • • • • • • • • • •

30 yr fixed mtg, 0 points, Los Angeles, CA, APR 4.625% 30 yr fixed mtg, 0 points, Los Angeles, CA, APR 4.625% 30 yr fixed, 0 points refi, Elizabeth, NJ, APR 4.625% 30 yr fixed, 0 points refi, Elizabeth, NJ, APR 4.750% 15 yr fixed mtg, 0 points, Orlando, FL, APR 3.875% 15 yr fixed mtg, 0 points, Orlando, FL, APR 4.000% 5/1 ARM, 0 points, Houston, TX, APR 3.125% 5/1 ARM, 0 points, Houston, TX, APR 3.250% 30 yr jumbo, 0 points, Cleveland, OH, APR 5.500% MMA , Los Angeles, CA, APY 1.09% $10K MMA , Tampa, FL, APY 1.09% 6 month CD, Metro, NY, APY 1.04% 6 month CD, Metro, NY, APY 0.50% 1 yr CD, Houston, TX, APY 1.27% 1 yr CD, Houston, TX, APY 1.01% 5 yr CD, Los Angeles, CA, APY 2.50% 5 yr CD, Los Angeles, CA, APY 2.39% CA, $30K home equity loan, APR 7.99% CA, $30K home equity loan, APR 8.87% TX, $50K home equity loan , APR 8.87% PA, $75K home equity loan , APR 4.99% PA, $75K home equity loan , APR 6.89% NY, $30K HELOC , APR 5.24% NY, $30K HELOC , APR 5.49%

• • • • • • • • • • •

FL, $50K HELOC, APR 5.49% Capital One, APR 11.9% - 19.9% (V) Discover Card, APR 11.99%-20.99% (Variable)* Chase, APR 11.99%-22.99% Variable* Discover Card, APR 11.99% - 20.99% (Variable)* Chase, APR 13.24%-19.24% (Variable)* Capital One, APR 12.9% - 20.9% (V) Capital One, APR 22.9%(V) Chase, APR 13.24% Variable* MetaBank, APR * Discover Card, APR 11.99%-20.99% (Variable)*

*Rates subject to change Economic Calendar Latest Report Next Update Inflation (CPI)

Aug. 15

Home prices

Aug. 27

Consumer confidence

Aug. 27


Aug. 29

Manufacturing (ISM)

Sept. 3


Sept. 6

Job Search job title or company location

• • • • • •

Accounting jobs Engineering jobs Finance jobs Management jobs Marketing jobs Sales jobs

See all jobs Hot List

Trading glitches sad new reality

Fast food wage protests head south

Future collectible cars unveiled at Pebble Beach

25 youngest towns

California home with private beach stairs CNNMoney Sponsors • • • • • • •

• About CNNMoney • Contact Us • Advertise with Us • User Preferences • Career Opportunities • Closed Captioning • Content • Fortune Magazine • Money Magazine • Business News • Markets • Term Sheet • Economy • Tech • Personal Finance • Small Business • Video • Magazines • Subscribe to Fortune • Subscribe to Money • Give the Gift of Fortune • Give the Gift of Money • Reprints • Special Sections • Magazine Customer Service • Conferences • Site Tools • Site Map • Watchlist • Portfolio • Job Search • Real Estate Search • Mortgage and Savings Center • Calculators • Corrections • Market Data Alerts • News Alerts • Stay Connected • My Account • Mobile Site & Apps • Facebook • Twitter • LinkedIn • YouTube • RSS Feeds • Newsletters • Tumblr • Google+

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2013 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2013 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2013. All rights reserved. Most stock quote data provided by BATS. © 2013 Cable News Network. A Time Warner Company. All Rights Reserved. Terms under which this service is provided to you. Privacy Policy. Ad choices .

Prices climb in June, but annual inflation still tame