CPI Report: Annual Inflation Rate Comes In At 3.4% In July, In Line With Expectations As Energy Prices Ease
Synopsis
The consumer price index rose 0.1% in July on a seasonally adjusted basis, after falling 0.4% in June.
- Core CPI, which excludes food and energy, showed a 0.2% increase in July, in line with expectations.
- Easing energy costs led the decline in headline prices, with the energy index down 1.5% in July, following a 5.7% fall in June.
- The BLS report also stated that the gasoline index fell 2.9% in July, while the index for natural gas and electricity edged up by 0.7% and 0.1%, respectively.
U.S. consumer prices inched up in July, according to the Consumer Price Index (CPI) report released on Wednesday, with both headline and core CPI coming in line with forecasts of economists.
According to data from the Bureau of Labor Statistics (BLS), CPI rose 0.1% in July on a seasonally adjusted basis, after falling 0.4% in June.
This pushed the annual inflation rate to 3.4% before seasonal adjustment, amid easing energy prices.
Core CPI, which excludes food and energy, rose 0.2% in July, in line with expectations, according to MarketWatch data.
On an annual basis, core CPI stood at 2.5%, in line with Wall Street expectations.
| Particulars | Actual | Forecast |
| CPI (MoM) | +0.1% | +0.1% |
| CPI (YoY) | +3.4% | +3.4% |
| Core CPI (MoM) | +0.2% | +0.2% |
| Core CPI (YoY) | +2.5% | +2.5% |
Source: Bureau of Labor Statistics, U.S. Department of Labor<
Energy Costs Ease
Easing energy costs led the decline in headline prices, with the index for energy declining 1.5% in July, following a 5.7% fall in June.
The BLS report also stated that the gasoline index fell 2.9% in July, while the index for natural gas and electricity edged up by 0.7% and 0.1%, respectively.
Over the 12-month period ending in July, the energy index is up 14.7%, while the gasoline index is up 24.6%.
Food Costs Inch Up
The BLS report also stated that food costs inched up by 0.1% during July after rising 0.2% in June, while the shelter index rose 0.1%.
The indexes for medical care, airline fares, communication, education, and recreation rose in July. However, motor vehicle insurance prices fell during the month, the report stated.
Meanwhile, U.S. equities gained in Wednesday’s pre-market trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.42%; the Invesco QQQ Trust ETF (QQQ) rose 0.93%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.22%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘neutral’ territory.
The iShares 7-10 Year Treasury Bond ETF (IEF) was up 0.33% at the time of writing.
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