United States: Inflation moderates in July
August 16, 2016
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.
Author: Ricardo Aceves, Senior Economist