Consumer prices inched up in July after declining sharply in June.
The consumer price index rose 0.1 percent compared with June, the Department of Labor said Wednesday. Compared with a year ago, the consumer price index is up 3.4 percent.
That matched the consensus forecast. In June, prices fell 0.4 percent while the consumer price index was up 3.5 percent from a year ago.
Core prices, a measure that excludes volatile food and energy prices, rose 0.2 percent compared with the previous month. For the year, core prices are up 2.5 percent, a decline in year-over-year inflation from the previous month’s 2.6 percent.
The moderate monthly readings across all times and core inflation, along with the decline in the year-over-year inflation rate, will likely ease concerns among Fed officials. Prices of fed funds futures implied the odds of a rate hike at the Fed’s next meeting in September fell from nearly 50 percent to around 40 percent.
Goods prices fell 0.2 percent, the second consecutive monthly decline. Excluding food and beverages, goods prices dropped 0.4 percent. Durable goods prices rose 0.3 percent after declining in May and remaining flat in June.
Services prices rose 0.2 percent following a flat June.
Grocery prices declined in July, with the index falling 0.1 percent. The index that covers restaurants and food consumed outside the home rose 0.3 percent.
The index for shelter rose 0.1 percent in July, which the government said accounted for roughly two-thirds of the monthly all-items increase. Rents climbed 0.1 percent and a measure of the implied cost of living in a home you own rose 0.3 percent. Homeowners’ and renters’ insurance fell 0.1 percent.
Excluding shelter, the CPI was flat for the month. A measure often referred to as supercore services, which strips out housing costs, rose 0.2 percent on the month.
The energy index declined 1.5 percent. Gasoline prices fell 2.9 percent for the month after declining 9.7 percent in June.
Prescription drug prices dropped by a sharp 0.8 percent, the fourth consecutive monthly decline. Nonprescription medicine prices fell 0.3 percent.
Prices of major appliances dropped 1.9 percent in July. These are down 4.1 percent from a year ago. Furniture prices were flat for the month.
New car prices were flat in July after declining 0.2 percent in June. New truck prices climbed 0.1 percent after a flat June. For the year, car prices are up 0.5 percent. Used car and truck prices rose 0.4 percent following a June decline. For the year, prices of used vehicles are down 1.9 percent. Motor vehicle insurance fell 0.3 percent, after falling two percent in June.
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