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After Two Months of Relentless “Core CPI Has Peaked” in Euroland, Services CPI Spikes to Record, Core CPI Worsens

July 20, 2023

by Wolf Richter Wolf Street

All eyes are now on underlying inflation. Forget the collapsing energy prices that pushed down overall CPI.

The inflation rate in services in the 20 countries that use the euro spiked to 5.4% in June, compared to a year ago, up from 5.0% in May, a new record in the data going back to 1997, according to Eurostat today, confirming preliminary estimates earlier this month.

“Core” CPI – without food and energy rose to 5.5%, up from the preliminary estimate for June of 5.4%, and up from 5.3% in May, according to Eurostat. Energy prices have plunged, and food prices, which had spiked horribly, are backing off. But underlying inflation – as measured by core CPI and services CPI – has turned into a stubborn headache.