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July Inflation Data Lags June

1_INFLATION.JULY

According to the latest federal data, inflation in the United States may have peaked.

The Consumer Price Index was unchanged in July from June, the Bureau of Labor Statistics said in its monthly statement yesterday. Year over year, the CPI rose 8.5 percent, lower than the 9.1 percent increase recorded in June.

“The index for all items less food and energy rose 0.3 percent in July, a smaller increase than in April, May, or June,” the bureau wrote in the statement, referring to July’s differential from June. “The indexes for shelter, medical care, motor vehicle insurance, household furnishings and operations, new vehicles and recreation were among those that increased over the month.”

The Producer Price Index declined by 0.5 percent in July from June, the bureau said in a statement this morning. Core PPI, which excludes food, energy and trade services, rose 0.2 percent. Both figures were below analysts’ estimates. The year-over-year increase was 9.8 percent.

Within PPI, the transportation and warehousing segment rose 2.5 percent from June.

The year-over-year increases are still among the highest in four decades, and the Federal Reserve has signaled additional interest rate hikes to bring inflation under control.

In a research note on Brunswick Corp. this week, BMO Capital Markets analysts wrote that boat demand will continue to be high, and boatbuilders will be able to manage rising interest rates and pass higher inputs costs through to the consumer.

“We think the industry has learned to perform with lower levels of inventory (utilizing more digital tools and sales methods, for example). If that occurs, then floor plan financing costs will be reduced (even with rising interest rates), as a result,” BMO analyst Gerrick Johnson wrote. “We think that promotional expenses and discounting will return but at lower levels than previous, at least in the intermediate term.”

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