A key measure of inflation most likely rose rapidly for a third month in June, economists said, a gain that could keep concerns about price hikes in the foreground at the White House and the Federal Reserve.

The Consumer Price Index, the Ministry of Labor’s measure of how much consumers pay for purchases like rent and plane tickets, rose 4.9% over the year to June, economists polled by Bloomberg predicted. This would mean that the pace of increase has slowed slightly – it was 5% for the year through May – but has remained high, supported by consumer demand as the economy reopens and a quirk in the markets. data.

Investors, lawmakers and central bank officials are watching the changes closely. Rapid price hikes can weigh on consumers if wages don’t keep pace, and if they appear to be holding up, it could prompt the central bank to withdraw support for the economy. The central bank’s cheap money policies are generally good for the markets, so a quick withdrawal would be bad news for investors in stocks and other asset classes.

Policymakers expect inflation to subside as the economy goes through a period of volatile and unprecedented pandemic reopening, but how quickly this will happen is unclear. Prices have climbed faster than Fed officials predicted earlier this year, with some measures of consumer inflation expectations starting to rise – a factor that could make inflation a self-fulfilling prophecy – and some central bank officials are increasingly wary of the change.

Here’s what to watch when the report comes out at 8:30 a.m.

Monthly data:

• The CPI is expected to have risen 0.5% from May, according to the Bloomberg survey on Monday afternoon. That would be slower than the 0.6% month-over-month increase in the previous month.

• Excluding volatile food and fuel prices, the CPI likely climbed 0.4% from 0.7% the month before.

Annual data:

• The CPI is expected to have risen 4.9% in the year to June, slower than the 5% in the year to May.

• Excluding volatile food and fuel prices, the CPI has likely increased 4% in the past year, compared to 3.8% in the year to May. It would be the fastest pace since 1992.

Prices of cars, rentals and restaurants

• Used car prices surged thanks to a semiconductor shortage that slowed auto production, and June may have been the end of that trend, Goldman Sachs economists wrote in an overview note.

• Housing costs are another area to watch: rent and a rental equivalent for owner-occupied homes have firmed up. Because they account for nearly a third of headline inflation, this strengthening could have a significant impact on price gains going forward.

• The “food away from homeThe category could also be interesting. Restaurants have seen demand rise even as they struggle to hire, and many have raised wages to attract workers. They can try to pass those costs on.

The base effect and personal consumption expenditure

• The “base effect” is a clumsy way of saying that because of the price drop last year, the price index gains appear to be artificially high this year. The oddity was at its peak in May. It should start to fade slightly in the June data, although there is still a factor behind the larger-than-usual increase.

• Analysts are watching the CPI closely because it is more timely, but the Fed’s target makes it a related but different index when it targets its average inflation target of 2%. This measure, the personal consumption expenditure index, tends to be slightly lower. It has also accelerated this year.