Tuesday, August 19, 2014

Consumer Prices Rose 0.1% in July

Prices rose by 0.1% in July, a slightly slower pace than the month prior. The increase from year-ago levels was 2.0%, consistent with the Federal Reserve’s 2.0% target. The most recent minutes from the Federal Reserve’s FOMC meeting noted that the likelihood of inflation running persistently below 2% has diminished somewhat. However core inflation, the focus of the FOMC, rose 1.9% over the year, slightly below the Fed’s target.

Energy prices dropped 0.3% in July, the largest monthly decrease since February. Gasoline prices fell 0.3%, contributing to the decline. Food prices grew 0.4%, a 30 basis point increase from the month prior. The faster pace increased the annual growth rate of food to 2.6%.

Core prices grew 0.1%, in line with the previous month. Airline fare, decreasing by 5.9%, had the most drastic decline, followed by gasoline prices. Goods prices grew 0.1%, consistent with the previous month.

Read the BLS report.

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