Consumer prices heated up as summer began in South Florida.
Consumer inflation rose to its highest annual level in a year last month in the Miami metropolitan area. Prices increased 3.1% in June, according to data released by the Bureau of Labor Statistics Tuesday. It represents a sharp rise in price trends compared to April.
The report also indicates how stubborn inflation is.
Economists like to strip out changes in food and energy prices because they tend to be more volatile month-to-month. What’s left is the so-called core inflation, giving a better picture of overall price trends. That core inflation was up 3.2% in June from a year ago. That represents the first bi-monthly increase in more than two years. Even taking out housing costs, regional inflation jumped back over 3.5% last month.
Prices for medical care, clothes and furniture were among the fastest rising in South Florida over the past year.
Compared to April, the regional consumer inflation rate rose 0.5%. The core rate increased 0.4%.
Nationally, consumer inflation rose to 2.7% from a year ago and up 0.3% from May. That represents the fastest rising general price trend since January, on a seasonally adjusted basis.
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The Federal Reserve targets an annual inflation rate of 2% to meet its stable prices mandate. The central bank also is charged with managing its monetary policy with the goal of full employment. The national unemployment rate in June was 4.1%.
President Donald Trump has been complaining for months about the Fed’s unwillingness to cut interest rates.
A week ago, Raphael Bostic, president of the Federal Reserve Bank of Atlanta, who is not a voting member of the Fed’s interest rate-setting committee this year, said the bank had the “luxury” of being patient before cutting rates. He attributed that to the strength in the job market.
The slowdown in the pace of home sales in South Florida has been blamed, in part on higher borrowing costs for buyers. The average 30-year mortgage rate nationwide is about 6.7% this month, according to Freddie Mac. It was 7% at the beginning of the year.
