US consumer prices see modest rise in July
Washington, US - US consumer inflation rose modestly in July, showing signs of life after months of weakening price pressures, the Labour Department said on Friday.
While inflation remains tame, the slight increase could help ease concerns among Federal Reserve policymakers who had been left befuddled by the absence of inflation in the first half of the year despite steady job creation and falling unemployment.
Rising costs for housing, med- ical care and food helped push the consumer price index (CPI) up 0.1 per cent in July, seasonally adjusted, after no change in June and a 0.1 decrease in May.
That however was still half of the increase expected by economists for the indicator, which tracks costs of household goods and services and is a closely watched measure of inflation.
The 12-month CPI measure also gained a tenth of a point in July growing to 1.7 per cent. It was the first rise in five months after steady declines, but still well below the Fed’s two per cent target. And unlike previous months, July’s gains were not entirely driven by the volatile food and fuel categories, since the increase was the same even when those categories were excluded, for both the monthly and the 12month core measures.
Core CPI has risen by 0.1 per cent for four consecutive months, consistently undershooting expectations. Analysts had expected July to see a 0.2 per cent gain.