The great oil-price plunge has been a boon for U.S. airlines, and now it’s starting to trickle down to consumers.
Jet-fuel prices have declined nearly 35% over the year, tracking the drop in oil prices, according to the Labor Department’s producer-price index. The decline has helped airlines produce their best-ever profits, as a front-page Wall Street Journal article on Wednesday reports.
Airlines have been cutting fares, though not nearly as precipitously, the government reported Wednesday. Airline fares fell 5.6% in July from a month earlier, the biggest decline since late 1995, the Labor Department’s consumer-price index shows. Fares fell at the same rate in the 12 months through July.
But consumers might not be noticing the decline all that much. The airfare drop has been offset by rising prices for other items, most notably rents and mortgage payments. So-called shelter costs rose 3.1% in July from a year earlier, the biggest jump since early 2008.
Overall, consumer prices are up just 0.2% from a year ago, a very weak reading reflecting mainly the drop in oil costs. Core prices, which exclude food and energy, rose 1.8%.
Corrections & Amplifications
An earlier version of this article incorrectly said that the decline in airfares in the year through July was the largest 12-month decrease since late 1995. It should have said that the decline in fares in July from a month earlier was the biggest monthly drop since that time. (Aug. 19, 2015)