Consumer prices saw only a modest increase in the month of July, according to a report released by the Labor Department on Tuesday, with higher prices for shelter and food offset by decreases in prices for energy and airline fares.
The Labor Department said its consumer price index ticked up by 0.1 percent in July after rising by 0.3 percent in June. The modest increase by the index matched economist estimates.
The uptick in consumer prices was partly due to higher food prices, which climbed by 0.4 percent in July after inching up by 0.1 percent in June.
The other food at home index increased by 0.7 percent, its largest increase since August of 2011, while the index for non-alcoholic beverages rose by 0.5 percent.
Meanwhile, the report showed that the energy index pulled back by 0.3 percent in July after surging up by 1.6 percent in the previous month.
The drop by the energy index represented its first decrease since March and featured declines in the indexes of all the major energy components.
Excluding food and energy prices, the core consumer price index inched up by 0.1 percent in July, matching the increase seen in the previous month. Economists had been expecting the core index to edge up by 0.2 percent.
The increase by the core index reflected higher prices for shelter, medical care, new vehicles, personal care, and apparel.
On the other hand, the report showed lower prices for airline fares, recreation, used cars and trucks, household furnishings and tobacco.
The Labor Department noted that the annual rate of growth by the headline consumer price index slowed to 2.0 percent in July from 2.1 percent in June.
Core consumer prices in July were up by 1.9 percent compared to the same month a year ago, unchanged from the rate of growth seen in June.
Paul Dales, Senior U.S. Economist at Capital Economics, said, "The recent softening in U.S. core consumer prices eases some of the pressure on the Fed to start considering rate hikes, although in our view only temporarily."
Last Friday, the Labor Department released a separate report showing only a modest uptick in producer prices in the month of July.
The Labor Department said its producer price index for final demand inched up by 0.1 percent in July after climbing by 0.4 percent in June. The modest increase by the index matched economist estimates.
Excluding food and energy prices, core producer prices rose by 0.2 percent in July, matching economist estimates as well as the increase seen in the previous month.
The report also showed a continued slowdown in the annual rate of producer price growth, which fell to 1.7 percent in July from 1.9 percent in June.
The annual rate of core producer price growth also slowed compared to the previous month, dipping to 1.6 percent from 1.8 percent.
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