Consumer prices held steady in June

Consumer prices held steady in June, but local and national economists warned that energy prices are up and may stay up for the duration of the summer.

Wells Fargo Bank reported Thursday in its Cost of Living Index that prices along the Wasatch Front were up 0.2 percent in June, due to a 0.7 percent spike in the price of clothing. Transportation costs fell 0.5 percent, reflecting a recent — and short-lived — drop in gasoline prices. Grocery prices dropped 0.2 percent. All other categories reported no change.

Nationally, the Labor Department reported that the U.S. Consumer Price Index was unchanged in June, compared with a decline of 0.1 percent in May. Energy prices fell by 0.5 percent nationally, following an even bigger 2 percent drop in May. Food costs were unchanged in June, while clothing prices saw a 0.7 percent drop.

"There is no evidence of accelerating inflation, or that there's an emerging inflation problem," said Kelly K. Matthews, executive vice president and economist at Wells Fargo in Salt Lake City.

Overall inflation nationwide is up 2.5 percent over the past 12 months, even with the increases in energy. The core rate of inflation — which excludes the more volatile food and energy categories — has risen 2 percent over the same period.

Analysts cautioned that the good news on energy will not last.

"It's important that we realize that these observations were taken in the first half of the month, when gasoline prices were still lower," Matthews said. Since that time, crude oil prices surged to record levels above $61 per barrel and gasoline pump prices jumped 10 cents, to a nationwide record of $2.33 per gallon.

Rolling energy prices have pulled the overall inflation picture to and fro all year, rising rapidly from February through April, and again this week. Matthews attributed the current increase, in part, to worries about crude oil supplies coming out of the Gulf of Mexico during hurricane season, along with the usual suspects: the conflict in the Middle East, the summer driving season and crude oil inventory shortages.

"The underlying supply position is a little bit more shaky," Matthews said. "Clearly, we've gone in the wrong direction the last little bit. With the disruption in the Gulf, with the driving season and gasoline demand, you can perhaps understand why we see the increase to the $60 range."