How steep was the inflation increase in June?
Posted on July 18, 2025

I’ve read a number of articles about inflation in June signaling higher inflation. The inflation rate (core inflation) in June was at an annual rate of 2.7%: not that high. The 12-month rate for several measures was higher in June than in May because this June replaced a very low June 2024. The six-month run rate for several measures of inflation is about 2.6% annual, similar to last month.

 

I display a table and six graphs that I use to follow the trends in inflation.

 

 

Details:

 

The two most widely-reported measures of inflation are Seasonally-adjusted inflation and Core inflation.

 

Seasonally-adjusted inflation is the most widely reported measure of inflation. June inflation was higher than the prior four months, but inflation in November, December, and January were higher than June. This June replaced a very low June 2024: 12-month inflation increased to 2.7% from 2.4% last month.

 

 

Core inflation excludes volatile energy and food components. June inflation is in line with the past 12 months. The .23% increase in June is an annual rate of 2.7%.

 

 

Personal Consumption Expenditures (PCE) excluding Food and Energy is the measure of inflation that the Federal Reserve Board favors. It’s similar to Core inflation, but tends to run a bit lower over time. The graph shows the data ending May; data for June is issued at the end of this month. The last six aim at an annual rate of 2.9%.

 

 

== History of 12-month inflation rates ==

 

Full-year inflation measured by CPI-U shows the uptick in this last month. [CPI-U is not seasonally adjusted; 12-month rates match the 12-month rates for Seasonally-adjusted inflation, above.] The 12-month rate is 2.7% as compared to 2.4% last month.

 

 

I add a graph that shows monthly rates. This June replaced a very low June 2024. The upcoming July through December will replace very low months of inflation. The reported 12-month inflation for this measure of inflation will likely increase in the next six months.

 

 

== Producer’s Price Index ==

 

The change in producer prices will impact consumer inflation. PPI was higher in June. but still low. The rate for the past 12 months was 1.7%.

 

 

== Services ==

 

Inflation for services was in line with prior months. The last six months average to 3.2% annual rate, almost the same as last month..

 

 

 

Conclusion: The inflation measures released this week for June were in line with recent months: we have not seen much of an increase due to greater tariffs. Measures aim at about 2.6% annual inflation, similar to last month.