Consumer Prices Steady in July

The U.S. Bureau of Labor Statistics (BLS) reported this morning that the U.S. consumer price index (CPI) did not change in July due to lower energy costs offsetting slightly higher food costs. Energy prices fell by 0.3% in July while the food index rose by 0.1%. Excluding food and energy, the core index rose 0.1% over the June reading.

The CPI rose 1.4% year-over-year, which is the smallest 12-month gain since 2010, and the core rate rose 2.1% compared with a year ago, the smallest change since late last year.

Economists had expected a rise of 0.2% in the CPI and a similar rise in the core index.

Gasoline prices began rising late last month and have been moving higher this month. Food prices have not moved much yet, as the impact of the drought in the United States will not reach consumers until later this year or early next.

The BLS noted, however, that food-at-home index has risen 1.9% in the past 12 months, although it was unchanged in July. The food-away-from-home index rose 0.2% in July and is up 2.9% over the past 12 months. Overall, the food index rose 0.1% in July and is up 2.3% in the past year.

Paul Ausick