The Bureau of Labor Statistics recently released Consumer Price Index (CPI) data for June 2011. The CPI tracks prices of a basket of commonly purchased goods and serves as a cost of living index. Below, we present month-by-month changes in U.S. CPI, seasonally adjusted, for the last five years. The shaded region represents ‘the great recession’ as dated by the NBER.

National CPI in June 2011 exhibits a minor decline compared to May 2011. This decline was driven primarily by gasoline; gas prices in June were 5% lower than May. Prior to 2008, this series did not exhibit any discernible trend. During ‘the great recession’, we saw a sharp decline in U.S. CPI. This downward spike sparked fears of deflation. Price levels, however, seem to have recovered from that fall. We expect U.S. CPI to follow its historical trend and prices of consumer goods to remain stable in the near future. In addition, we show change in CPI for the Los Angeles area. This region includes Los Angeles, Orange, Riverside, San Bernardino, and Ventura Counties. Changes in CPI in this region closely track changes in the national CPI. We also saw a minor down-tick in the Los Angeles CPI, compared to May 2011. As with national CPI, we expect prices to remain stable in the Los Angeles area.

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