Sure enough, a 6.3% increase in the gasoline index accounted for about two thirds of the change in CPI in June.Core CPI, which excludes food and energy, rose 0.2%, which was right in-line with expectations. Declines in the indexes for airline fares, used cars and trucks, and recreation helped offset advances in the indexes for shelter, medical care, and apparel. Over the last 12 months, total CPI has risen 1.8% (versus 1.4% in May) while core CPI has increased 1.6%. The latter is the smallest 12-month change since June 2011, which should resonate with the Fed as a reason why it must maintain highly accommodative monetary policy.
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