US inflation rose for a sixth straight month in July but at a markedly slower pace than in June and May, according to government data released on Wednesday, August 19.
American consumers spent less on vehicles, transportation and some energy items like fuel oil and electricity but they continued to pay more for food, gasoline and housing. In addition, clothing and healthcare costs went up.
Overall, US consumer prices climbed 0.1% in July after surging 0.3% in June and soaring 0.4% in May, the US Labor Department summarized in a monthly report on the Consumer Price Index (CPI). The CPI measures what Americans pay for everything from homes to fruits and vegetables.
Prices at the pump rose 0.9% in July, slowing from much sharper pick-ups of 3.4% in June and 10.4% in May. Still, they are 22.3% lower than a year earlier. The broader price category for energy went up just 0.1% last month after advancing 1.7% previously, and it is down 14.8% from a year ago.
The cost of groceries was higher for a second month in a row, rising 0.2% in July after increasing 0.3% in June for their first positive reading since February.
"A surprisingly weak set of inflation figures that suggests that there is still more slack in the U.S. economy than we had believed," MarketWatch quoted Paul Ashworth, chief U.S. economist at Capital Economics.
The price of eggs spiked 24.9%, the CPI report noted, after soaring 18.3% previously. Food prices are 1.6% higher than a year ago.
Stripping away energy and food, so-called core consumer prices rose 0.1% in July after rising 0.2% in June.
"A 0.4-percent advance in the shelter index was the main contributor to the increase," the BLS report said, "though the indexes for medical care and apparel also rose."
Within several watched groupings, July changes include:
- medical care commodities and services, up 0.1%;
- clothing, up 0.3%;
- new vehicles, down 0.2%;
- used cars and truck prices, down 0.6%;
- airline fares, down 5.6%;
- transportation, down 0.2%.
Several categories were unchanged, including those for personal care, recreation, alcoholic beverages, and tobacco.
In the more extended annual period, US inflation rose 0.2% in the 12 months through July after moving up by 0.1% in June. June’s increase was the first year-to-year gain in inflation since December.
In rounding out the Labor Department’s report, core US inflation increased 1.8% on a year-over-year basis to match the 12-month increase through June. The core annual reading is the benchmark inflation rate monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set the key interest rate. The Fed has a 2% annual inflation target.
"Fed officials made clear that they do not need to see higher inflation before hiking. They just need to have reasonable confidence it will return to mandate," Reuters quoted Michelle Girard, chief economist at RBS in Stamford, Connecticut.
Other 12-month advances in core US inflation include 1.7% through May, 1.8% through April and March; 1.7% through February; and 1.6% through January.
Inflation data follows with a table showing monthly and annual percentage changes in the prices of consumer goods and services that the US Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi) surveys and analyzes.
January 2014 – July 2015 Consumer Prices – Gains & Losses in Percent
|Jan 2015||Feb 2015||Mar 2015||Apr 2015||May 2015||June 2015||July 2015||12 Month|
|Food at home||-0.2||0.1||-0.5||-0.2||-0.2||0.4||0.3||0.9|
|Food away from home||0.2||0.3||0.2||0.2||0.2||0.2||.0||2.7|
|Gasoline (all types)||-18.7||2.4||3.9||-1.7||10.4||3.4||0.9||-22.3|
|Utility (piped) gas service||-3.4||-2.0||-2.7||-2.6||.0||0.3||-1.4||-14.2|
|All items less food, energy||0.2||0.2||0.2||0.3||0.1||0.2||0.1||1.8|
|Commodities less food, energy||-0.1||0.2||0.3||0.1||-0.1||-0.1||-0.1||-0.5|
|Used cars and trucks||-0.1||1.0||1.2||0.6||-0.4||-0.4||-0.6||-1.1|
|Services less energy||0.3||0.1||0.2||0.3||0.2||0.3||0.2||2.6|
Bureau of Labor Statistic data on US inflation is published around mid-month. The information details consumer prices through to the previous month. Consumer Price Index data with August inflation and through to the latest annual period becomes public on September 16, 2015.
CPI data is used in calculating inflation rates and it is the backbone for this site’s calculator for US inflation. The US Inflation Calculator provides accumulated inflation and the change in buying power of the dollar over time.