U.S. CPI & Core Prices Increase Modestly in July

Price inflation has stabilized. The Consumer Price Index rose 0.2% in July, the same as in June. The gain matched expectations in the Action Economics Forecast Survey. The 3.2% y/y rise was increased from 3.0% in June, but still nearly the weakest since March 2021 and down from the 9.1% high in June 2022. Prices excluding food & energy also rose an expected 0.2% last month, the same as in June but below the three consecutive 0.4% increases from March through May. The 4.7% y/y increase was the lowest since October 2021 and down from a 6.6% high in September 2022.

The CPI less food, energy and shelter, another measure of core pricing power, eased 0.1% during July after holding steady in June. The 2.5% y/y increase remained below the 7.6% peak in February of last year.

In July, used car & truck prices weakened 1.3% (-5.6% y/y) following a 0.5% June decline. The CPI excluding food, energy, shelter and used car & truck prices held steady for the second straight month. The 3.4% y/y rise remained well below the 6.7% high in September of last year.

Goods prices less food, energy and used car & trucks eased 0.2% in July (+2.5% y/y) after holding steady for three consecutive months. Education & communication goods costs fell 1.2% (-7.8% y/y), after modest declines in the three prior months. Recreation product prices fell 0.8% (+1.0% y/y) following a 0.4% June decline. Home furnishings prices weakened 0.4% (+2.2% y/y), off for the fourth straight month but appliance costs rose 0.5% (-0.5% y/y) following three straight monthly declines. Apparel prices held steady (3.2% y/y) after four straight 0.3% increases and new vehicle prices eased 0.1% (+3.5% y/y) after holding steady in June.

Service costs less energy in July increased 0.4% (6.1% y/y) for the fourth time in five months. Shelter prices rose 0.4% (7.7% y/y) for a second straight month as owners’ equivalent rent of primary residences increased 0.5% (7.7% y/y) down from a 0.8% December high. Rents of primary residences rose 0.4% (8.0% y/y) after two 0.5% increases. Education & communication prices rose 0.3% (2.7% y/y) after falling moderately for two straight months while transportation service prices rose 0.3% (9.0% y/y) after a 0.1% uptick. Recreation service prices rose 0.8% (6.2% y/y) after increasing 0.5%, but medical care service costs fell 0.4% (-1.5% y/y) after holding steady in June.

Energy prices ticked 0.1% higher last month (-12.5% y/y) after a 0.6% June rise. Gasoline prices increased 0.2% (-19.9% y/y) after rising 1.0% in June. Fuel oil & other fuel costs rose 3.7% (-21.2% y/y) after weakening 1.4% in June but electricity prices fell 0.7% (3.0% y/y), down for the fourth month in the last five. Natural gas prices surged 2.0% (-13.7% y/y) after five straight months of decline.

Food prices rose 0.2% (4.9% y/y) in July following a 0.1% June rise. Egg prices fell 2.2% (-13.7% y/y), off for the sixth straight month. Meat, poultry & fish prices improved 0.7% (0.9% y/y) after edging 0.1% higher in June, while cereal & bakery product prices held steady (7.0% y/y) after little change in the prior two months. Fruit & vegetable prices jumped 0.4% (2.9% y/y) after rising 0.8% and dairy prices rose 0.5% (1.3% y/y) after four straight months of decline. Nonalcoholic beverage prices held steady (5.4% y/y) after easing 0.1% in June.

The Consumer Price figures can be found in Haver's USECON database. The expectations figure is contained in the AS1REPNA database.