| Actual | Previous | |
| Month over Month | 0.0% | 0.2% |
| Year over Year | 0.5% | 0.6% |
Highlights
Consumer prices were unchanged in June compared to May when they increased 0.2 percent. On a year-on-year comparison, they were 0.5 percent higher than June of last year. In May, prices were up 0.6 percent year-on-year.
The core inflation measure which excludes fresh food and energy was also unchanged month-on-month and 0.3 percent higher than June of last year.
Energy prices which had been driving inflation higher in previous month, had the opposite effect in June. Petroleum product prices fell 3.4 percent in June, while increasing 15.4 percent year-on-year. Prices for diesel subtracted 0.014 percentage points from the headline number, while heating oil subtracted 0.068 percentage points.
That helped offset 0.6 percent increases for food and non-alcoholic beverages, alcohol and tobacco, and eating establishments.
Prices for imported goods fell 0.1 percent month-on-month in June, the strong Swiss franc helping, and were 0.2 percent higher year-on-year. Prices for domestic products rose 0.1 percent month-on-month and 0.5 percent year on year.
Goods prices were unchanged in June and 0.3 percent below year-ago-levels, while services prices were also unchanged month-on-month and up 0.9 percent year-on-year.
Definition
The consumer price index (CPI) is an average measure of the level of the prices of goods and services bought for the purpose of consumption by Swiss households. Monthly and annual changes in the CPI provide widely used measures of inflation. The policy target measure for the Swiss National Bank (SNB), the annual CPI rate can be distorted by swings in prices amongst the more volatile subsectors and the CPI excluding fresh food and energy is used as a better guide to underlying short-term trends. Although not a member of the Eurozone, a harmonized index of consumer prices (HICP), measured according to Eurostat's procedures, is also published alongside the CPI.
Description
The consumer price index is the most widely followed indicator of inflation. An investor who understands how inflation influences the markets will benefit over those investors that do not understand the impact. Inflation is an increase in the overall prices of goods and services. The relationship between inflation and interest rates is the key to understanding how indicators such as the CPI influence the markets- and your investments. Inflation (along with various risks) basically explains how interest rates are set on everything from loans to notes and bonds. As the rate of inflation changes and as expectations on inflation change, the markets adjust interest rates. The effect ripples across stocks, bonds, commodities, and your portfolio, often in a dramatic fashion. By tracking inflation, whether high or low, rising or falling, investors can anticipate how different types of investments will perform. Over the long run, the bond market will rally (fall) when increases in the CPI are small (large). The equity market rallies with the bond market because low inflation promises low interest rates and is good for profits.