Purchasing Power: Has Inflation Peaked?
After adjusting for seasonal variations, consumer prices remained stable in July 2023, just as they did in June.
In July 2023, the Consumer Price Index (CPI) rose 0.1% month-over-month, following a 0.2% increase in June. Food prices slowed (+0.1% after +0.3%), while prices for services accelerated (+1.5% after +0.2%), particularly for transportation (+11.0% after +1.6%) and “other services” (+1.4% after +0.4%). Conversely, prices for manufactured goods fell (–2.3%, following a 0.1% increase in June), particularly for clothing and footwear (–10.9% following a 0.3% increase), due to summer sales. Energy prices also fell (–2.0% after +0.1%), driven by a decline in gas prices (–11.4% after +0.2%).
Year-over-year, consumer prices rose 4.3% in July 2023, following a 4.5% increase in June. This decline in inflation was due, on the one hand, to a year-over-year drop in energy prices that was sharper than the previous month (3.7% after 3.0%), and, on the other hand, to a slowdown in food prices (+12.7% after +13.7%) and manufactured goods prices (+3.4% after +4.2%). Inflation for tobacco remained stable compared with the previous month (+9.8%), while service prices rose slightly (+3.1% after +3.0%).
Core inflation declined year-over-year, reaching +5.0% in July 2023, down from +5.7% in June.
Core inflation excludes highly volatile prices, such as those for energy and food, thereby revealing an underlying trend in price changes. The Harmonized Index of Consumer Prices (HICP) remained stable month-over-month, following a +0.2% increase in June; year-over-year, it rose by 5.1% in July 2023, following a +5.3% increase the previous month.
