Inflation hasn’t quite slammed on the brakes yet, but it did at least tap them in July.
The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in July on a seasonally adjusted basis, after rising 1.3% in June, the U.S. Bureau of Labor Statistics (BLS) said today.
In addition, over the past 12 months, the all-items index increased 8.5% before seasonal adjustment, more than half a point below the 9.1% annual rate from June. The July rate was also below the 8.7% annual increase expected by economists.
The Federal Reserve — which has been trying to tame rampant inflation this year with four increases in the federal funds rate, including consecutive 75-basis-point increases in June and July — has been looking for signs that the hikes have had an effect. The Fed’s Federal Open Market Committee is scheduled to meet four more times before the end of the year, with the next meeting scheduled for Sept. 20-21.
According to the BLS report, the gasoline index fell 7.7% in July, offsetting increases in the food and shelter indexes. That resulted in the all-items index being unchanged from June.
The energy index fell 4.6% over the month, as the indexes for gasoline and natural gas declined, but the index for electricity increased. The food index also continued to rise, up 1.1% over the month as the food at home index rose 1.3%.
The index for all items less food and energy, considered the core inflation index, rose 0.3% in July, a smaller increase than in April, May, or June. The indexes for shelter, medical care, motor vehicle insurance, household furnishings and operations, new vehicles, and recreation were among those that increased over the month.
Some indexes did decline in July, including those for airline fares, used cars and trucks, communication, and apparel.
July’s 8.5% annual increase in the all-items index was driven in part by a 5.9% increase in the all items less food and energy index, which rose 5.9% over the past 12 months. The energy index increased 32.9% for the 12 months ending July, a smaller increase than the 41.6% increase for the period ending in June.
The food index increased 10.9% over the last year, the largest 12-month increase since the period ending May 1979, the BLS said.