US con­sumer prices ticked up 0.3% in July

Baltimore Sun - - NATION & WORLD -

WASHINGTON — U.S. con­sumer prices rose 0.3% in July, pushed higher by more ex­pen­sive gas, med­i­cal care and hous­ing.

The con­sumer price in­dex in­creased 1.8% com­pared with a year ear­lier, up from 1.6% in June, the La­bor Depart­ment said Tues­day. Ex­clud­ing the volatile food and en­ergy cat­e­gories, core prices moved up 0.3% in July and 2.2% from a year ago.

The fig­ures sug­gest that in­fla­tion is pick­ing up slightly, though it re­mains mod­est. The econ­omy is in its 11th year of growth, un­em­ploy­ment is low, and wages are grow­ing mod­estly.

But many com­pa­nies are re­luc­tant to charge more in the face of on­line and global com­pe­ti­tion.

While last month’s price gains were mod­est, they were wide­spread. Cloth­ing prices in­creased 0.4%, used car and truck prices moved up 0.9%, and pre­scrip­tion drug costs rose 0.4%. Air­line fares jumped 2.3%.

Rents rose 0.3% and are up 3.5% in the past year. Ho­tel stays have got­ten 4.6% more ex­pen­sive in the past year.

There are some signs higher wages may be hav­ing an ef­fect. The cost of hous­ing op­er­a­tions, such as clean­ing, land­scap­ing and mov­ing, jumped 5.4% in the past year.

The Fed­eral Re­serve main­tains a 2% in­fla­tion tar­get to avoid the desta­bi­liz­ing ef­fect of de­fla­tion, which can pull down prices and wages.

It has mostly missed that tar­get since it was es­tab­lished in 2012. Its pre­ferred mea­sure rose 1.4% per­cent in June com­pared with a year ear­lier. That mea­sure isn’t as in­flu­enced by rental prices.

Fed Chair­man Jerome Pow­ell has cited tame in­fla­tion as a key rea­son the cen­tral bank cut short-term in­ter­est rates last month. Most econ­o­mists ex­pect fur­ther cuts this year to off­set the neg­a­tive im­pact of the Trump ad­min­is­tra­tion’s trade war with China.

GERRY BROOME/AP

Gas prices jumped 2.5% in July, but have fallen back. The av­er­age price for a gal­lon of gaso­line was $2.64 Tues­day.

Newspapers in English

Newspapers from USA

© PressReader. All rights reserved.