The overall cost of living in the United States flattened in July, and the rate of annual inflation eased, according to a government report released on Tuesday, Aug. 16.
Falling gasoline prices offset increases in other areas like housing and medical care, while costs of clothing and grocery store items were little changed to flat.
U.S. consumer prices were unchanged in July, the Labor Department said in its monthly report on the Consumer Price Index. The CPI measures what American consumers pay for everything from airfare to fruits and vegetables. The lack of an advance was a first in five months and followed an increase of 0.2% in June.
"Inflation is very likely to remain tame at best," Bloomberg News quoted Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. "Other than housing and medical care, vast sectors of the economy are still seeing negative price pressures."
Prices at the pump dropped 4.7% last month, their first decline since February, after rising 3.3% in June. They surged as high as 8.1% in April for their biggest jump since August 2012. Gasoline prices are 19.9% lower compared to a year ago, the Labor Department notes. Regular gasoline averaged $2.125 a gallon on Tuesday, according to AAA, down from the year-ago average of $2.669 a gallon.
The broader index for energy, which combines items like gasoline, electricity and fuel oil, declined 1.6% in July following a 1.3% increase in June. Over the past 12 months, energy prices have tumbled 10.9%.
Food prices were unchanged overall, after declines of 0.2% and 0.1% in May and June. They are 0.2% higher than a year earlier, however.
Stripping volatile food and energy, so-called core consumer prices rose 0.1% in July following gains of 0.2% in each of the three previous months.
"The shelter index rose 0.2 percent, its smallest increase since March, and the indexes for medical care, new vehicles, and motor vehicle insurance also rose," the Labor Department’s report said. In contrast, the indexes for airline fares, used cars and trucks, communication, and recreation were among those that declined in July."
U.S. inflation picked up by a rate of 0.8% over the past year after two consecutive increases at 1%. The level marks the lowest rate of inflation since the 12 months ended December, and the year-on-year climb dropped further below the 1.7% average annual increase over the last 10 years.
In rounding out the Labor Department’s report, core U.S. inflation ran 2.2% quicker on an annual basis after running at a 2.3% pace in the 12 months ended June. The core annual reading is one of the benchmark inflation rates monitored by the Federal Open Market Committee (FOMC) as it helps the central bank decide where to set the key interest rate.
Inflation data below is from the last seven months through July, as published by the US Labor Department’s Bureau of Labor Statistics (www.bls.gov/cpi). To get the data, the BLS monitors prices of consumer goods and services from around the nation. These prices are continually collected, analyzed and then summarized in monthly reports. The data offers the monthly and latest annual changes in percentages.
January to July 2016 Consumer Prices – Gains & Losses in Percent
|Jan 2016||Feb 2016||Mar 2016||Apr 2016||May 2016||June 2016||July 2016||12 Month|
|Food at home||-0.2||0.2||-0.5||0.1||-0.5||-0.3||-0.2||-1.6|
|Food away from home||0.3||0.1||0.2||0.2||0.2||0.2||0.2||2.8|
|Gasoline (all types)||-4.8||-13.0||2.2||8.1||2.3||3.3||-4.7||-19.9|
|Utility (piped) gas service||-0.6||1.0||-0.7||0.6||1.7||-0.4||3.1||-0.4|
|All items less food, energy||0.3||0.3||0.1||0.2||0.2||0.2||0.1||2.2|
|Commodities less food, energy||0.2||0.3||-0.2||-0.1||-0.2||-0.2||-0.1||-0.6|
|Used cars and trucks||0.1||0.2||-0.1||-0.3||-1.3||-1.1||-1.0||-3.7|
|Services less energy||0.3||0.3||0.2||0.3||0.3||0.3||0.2||3.1|
The BLS usually publishes new inflation data around the middle of a month with consumer prices current to the previous month. The Consumer Price Index (CPI) for August and the latest 12-month or annual period becomes public on September 16, 2016.
CPI data is used in calculating inflation rates and in this site’s calculator for inflation in the United States. The US Inflation Calculator tool on the homepage shows accumulated inflation and the change in buying power of the U.S. dollar over time.