US con­sumer prices see mod­est rise in July

Muscat Daily - - BUSINESS -

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.

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