Headline consumer-price index rises 0.5%; core rate’s up 0.2%
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — The cost of living for Americans rebounded in July after a rare decline in June, data showed Thursday.
The consumer price index, tracking the rate of inflation at the retail level, increased 0.5% in July, the biggest gain since March, the Labor Department said.
The growth was above the consensus forecast of economists polled by MarketWatch who had been looking a 0.4% increase. Read MarketWatch’s comprehensive economic calendar.
Core prices — which exclude volatile food and energy cost inputs — increased 0.2% on the month, matching expectations of a slight moderation. Core inflation had risen 0.3% in both May and June, raising the eyebrows of investors and economists alike.
July’s core rate was boosted by a 0.3% gain in shelter costs. it’s largest increase since June 2008.
The culprit for higher overall inflation was energy prices, however.
Energy prices increased 2.8% last month, the first gain after monthly declines in both May and June.
Also of note, food prices rose 0.4% in July, doubling a 0.2% gain in the prior months.
Apparel prices rose 1.2%. Prices charged for medical care increased 0.3% for the fourth straight month, the government’s data showed.
New car prices were flat in July, while used car prices rose 0.7%.
In its latest policy statement earlier this month, the Federal Reserve said that it expects inflation will settle down over coming quarters.
In the past year, the CPI has risen 3.6%. The core CPI has risen 1.8%, close to the just-below 2% informal target that Fed officials have talked about.
