- The Consumer Price Index (CPI) showed a seasonally adjusted increase of 0.1% in July, according to the Bureau of Labor Statistics.
- Excluding food and energy, core CPI rose 0.2% in July, and on an annual basis, the inflation rates were 3.4% and 2.5%.
- Traders cut the probability for a September rate hike to 42%, according to the CME Group's FedWatch gauge.
- Both food and shelter saw 0.1% increases in July, with shelter accounting for about two-thirds of the headline increase.
- Energy prices dropped 1.5% in July following a 5.7% decrease in June, but still saw an annual increase of 14.7% after sharp gains in prior months, including a 10.9% surge in March.
- Though levels held well above the Fed's 2% target, the tame monthly readings, coupled with moderate June levels, indicate that the energy-fueled burst earlier in the year is easing, though prices remain volatile.
- All readings were in line with the Dow Jones consensus forecasts.
- New vehicle prices rose 0.1%, used cars and trucks increased 0.4%, medical care was up 0.4%, and airline fares accelerated by 2.2%.
Consumer prices rose 0.1% in July, as reported by the Bureau of Labor Statistics, maintaining an annual inflation rate of 3.4%. This increase aligns with the Dow Jones consensus forecasts, indicating a steady inflation trend despite remaining above the Federal Reserve's 2% target.12356101112
Core CPI, which excludes food and energy, saw a 0.2% rise, while energy prices dropped 1.5% for the month, following a 5.7% decrease in June. Despite these fluctuations, energy prices have increased 14.7% annually, reflecting volatility in the sector.78
Food and shelter both recorded 0.1% increases in July, with shelter accounting for about two-thirds of the overall price rise. New vehicle prices rose 0.1%, and used cars and trucks saw a 0.4% increase. Medical care costs increased by 0.4%, while airline fares surged by 2.2%.
In response to these inflation figures, traders have cut the odds of a September rate hike to 42%, according to the CME Group's FedWatch gauge, reflecting a cautious approach by the market amid ongoing economic uncertainties.4
“Core CPI rose 0.2% in July, with annual rates at 3.4% and 2.5%, all in line with Dow Jones consensus forecasts. Energy prices dropped 1.5% for the month but still saw a 14.7% annual increase, while shelter accounted for about two-thirds of the headline gain.”
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