United States Inflation June 2016

United States

Inflation moderates in July

Seasonally-adjusted consumer prices were flat in July compared to the previous month. The result came in below the 0.2% increase observed in June and fell short of the 0.1% increase the markets had expected and reflected that a decline in energy prices (-1.6% month-on-month) had offset moderate gains in other categories. Meanwhile, food prices were unchanged over the previous month. Inflation inched down from 1.0% in June to 0.8% in July, which represents the slowest rate so far this year.

Core consumer prices, which do not include foodstuff and energy prices, increased 0.1% over the previous month, which came in below both the 0.2% rise observed in June and the 0.2% market analysts had forecast. Core inflation remained unchanged at June’s 2.2% in July.

Although the Federal Reserve targets an alternative measure of inflation called the personal consumption expenditures price index, it also follows the core inflation measure closely to judge whether inflationary pressures are increasing in the economy.

FocusEconomics Consensus Forecast participants expect inflation to average 1.4% in 2016, which is unchanged from last month’s forecast. For 2017, the panel expects inflation to average 2.3%.

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United States Inflation Chart

USA Inflation July 2016

Note: Year-on-year and month-on-month variation of seasonally-adjusted consumer price index in %.
Source: Bureau of Labor Statistics.

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