The June, 2024 Consumer Price Index for All Urban Consumers (CPI-U) declined by 0.1 percent on a seasonally adjusted basis, following no change in May. Annually, the all items index saw a 3.0 percent rise before seasonal adjustment.
Key Changes in CPI Components:
- Gasoline: Prices fell by 3.8 percent in June, building on a 3.6 percent decline in May, contributing significantly to the overall decrease in the index.
- Energy: Overall energy costs declined by 2.0 percent for two consecutive months.
- Food: There was a modest increase of 0.2 percent in June, with food away from home rising by 0.4 percent and food at home by 0.1 percent.
- Other Items (Excluding Food and Energy): This category saw a 0.1 percent rise in June, down from a 0.2 percent increase in May. Increases were noted in shelter, motor vehicle insurance, household furnishings and operations, medical care, and personal care. Conversely, there were decreases in airline fares, used cars and trucks, and communication.
Yearly Trends:
- The all items index increased by 3.0 percent over the past 12 months, showing a slight deceleration from the 3.3 percent annual rise reported in May.
- The core index (excluding food and energy) rose by 3.3 percent over the last 12 months, marking the smallest annual increase since April 2021.
- Energy costs increased by 1.0 percent year-over-year.
- Food costs rose by 2.2 percent over the same period.
Impact on Minority Businesses
Minority-owned businesses, which are often more vulnerable to economic fluctuations, may experience mixed impacts from these CPI changes:
1. Energy and Transportation Costs: The decline in gasoline and energy prices could lower operating costs for minority businesses reliant on transportation and energy-intensive processes. This could improve their profit margins, especially for those in logistics, transportation, and delivery services.
2. Food Industry: The modest increase in food prices, particularly for food away from home, may impact minority-owned restaurants and food service providers. While food at home prices saw a smaller rise, those in the grocery and retail food sectors might face a mixed impact depending on their pricing strategies and customer base.
3. Shelter and Insurance: The rise in shelter and motor vehicle insurance costs could strain minority business owners who need to manage higher operational costs for their facilities and fleets. This might necessitate adjustments in budget allocations or pricing to maintain profitability.
4. Consumer Spending Power: With the overall CPI rising by 3.0 percent, consumer purchasing power may be slightly reduced, potentially affecting minority businesses that rely on discretionary spending. However, the slower growth rate in the core index suggests that inflationary pressures are easing, which could stabilize consumer spending patterns over time.
5. Health and Personal Care: Increases in medical care and personal care indexes could affect minority business owners and employees in these sectors, potentially leading to higher costs for services and products. However, those providing such services might see increased demand as these sectors expand.
Overall, the easing inflationary trends offer a more stable economic environment for minority businesses moving forward. These businesses should continue to monitor CPI trends and adjust their strategies to mitigate potential cost pressures and capitalize on areas of reduced expenses.