The latest report by the Bureau of Labor Statistics showed prices moderating across a range of goods and services, possibly taking the urgency out of an imminent interest rate hike.
The consumer price index, which is part of the Federal Reserve’s inflation dashboard, indicated a seasonally adjusted rise of 0.1% in July, when excluding food and energy, the core CPI increased by 0.2%.
The annual inflation rates were 3.4% and 2.5%, each decreasing by 0.1 percentage point from June.
Although the levels stay well above the Fed’s 2% target, the subdued monthly readings, along with moderate levels in June, suggest that the energy-driven surge earlier this year is slowing down. However, prices continue to be volatile and are affected by continually changing conditions in the Middle East.
Both food and shelter experienced a 0.1% rise in July. Shelter costs had been persistently high and were a major factor keeping inflation above 2%. Despite the small increase, shelter made up roughly two-thirds of the overall rise, according to the BLS. The index was partly offset by a significant 2.8% drop in away-from-home lodging costs. Additionally, a key measure estimating what property owners could charge in rent rose by 0.3%.
New vehicle prices increased by 0.1%, while used cars and trucks went up by 0.4%. Medical care costs rose by 0.4%, and airline fares accelerated, climbing 2.2%.
All of the BLS readings were line with the Dow Jones consensus forecasts.
By CEO NA Editorial Staff
