State Street PriceStats: Inflation runs out of fuel

For the first time in more than 18 years, United States energy price levels fell in the month of June as fuel prices began to catch up with the correction in oil prices.
 

The State Street PriceStats index declined by 0.18 percent in June on a non-seasonally adjusted (NSA) basis. Given that prices typically rise in the month of June, this produced an even bigger fall in the annual inflation rate, which dropped to 4.5 percent from its peak of 5 percent at the end of May. This still leaves inflation more than two percentage points above the level at the end of February. However, if June’s pace of disinflation continues through the third quarter, inflation may return to pre-war levels by October.

State Street PriceStats enables daily inflation measurement with just a three-day lag, offering timely insights that complement traditional government statistics. It serves as a valuable leading indicator and is especially useful during periods when government releases are delayed or unavailable. Its daily insights are increasingly relevant for policymakers, investors, and analysts seeking to track inflation dynamics in real time.

Covering over 27 countries and multiple sectors — including food, health, and transportation — State Street PriceStats uses consistent methodologies to ensure its indicators are comparable across geographies, time periods, and official data sources.

A modest 0.18 percent decline in the State Street PriceStats index does not look like much compared to the cumulative 3 percent rise seen in the previous three months. However, it is significant for the following reasons.

First, outright declines in prices during June are highly unusual. In fact, this marks the first decline State Street PriceStats has recorded in the history of our dataset, going all the way back to 2008. The decline contributed to a 0.5 percentage-point drop in annual inflation over the month, the largest monthly decrease in the annual inflation rate in more than 40 months.

Second, June’s fall in energy prices only marks the beginning in a series of declines. While wholesale oil markets have fully returned to their pre-war levels, US vehicle fuel prices have only declined 20 percent from their peak and remain 30 percent above their level at the end of February. This indicates that we can anticipate further declines in the coming months. If June’s decline were to be replicated across the third quarter, this would bring the State Street PriceStats annual inflation rate back to 2.7 percent — its pre-war level — as soon as October, other things being equal.

Third, during what has been one of the biggest inflation shocks in recent years, State Street PriceStats data has proven to be a reliable guide to trends in the subsequent data readings from the Bureau of Labor Statistics (BLS). If this pattern holds in the BLS June release, it would be consistent with the view that headline inflation has likely peaked for the year, despite only a modest decline in June.
 

About the State Street PriceStats indicators

The State Street PriceStats series are designed to provide a low-latency and high-frequency view into inflation trends that are comparable to the official consumer price index (CPI). The features of the process are as follows:

• Daily online price collection: State Street PriceStats collects price data daily from over 1,500 multi-line retailers using web scraping technologies, focusing on those with both online and physical stores. Research has shown that retailers tend to adjust online prices first.
• Data structuring and cleaning: Models then clean and standardize raw price data to ensure consistency across more than 40 million products, converting unstructured HTML into structured datasets ready for analysis.
• Categorization and quality checks: State Street PriceStats categorizes prices by economic sectors and sub-sectors, calculates performance statistics, and applies a red-flag system with daily manual checks to resolve data anomalies.
• Index calculation using econometric techniques: State Street PriceStats computes daily inflation statistics using proprietary econometric methods and publishes the results with a three-day lag.
• Retailer and product selection: State Street PriceStats selects retailers based on market share and city presence, and includes over 500,000 daily prices — far exceeding the 80,000 monthly prices used by the BLS.
• Use of CPI weights and no quality adjustments: State Street PriceStats applies official CPI weights where possible and adjusts for online data characteristics, calculating price changes only from consecutive observations of identical products without applying standard quality adjustments.

For more information or to request a demo, visit our State Street PriceStats Solutions page.