US consumer price increases slowed in July, although they remained at a 13-year high on an annual basis.
According to Labor Department data released on Wednesday, the US consumer price index increased 0.5% from June and 5.4% from a year ago. July’s 0.5% increase follows a 0.9% increase in June. The decline in the month-to-month inflation rate was the largest decline in 15 months.
Excluding the more volatile food and energy components, the so-called core CPI increased 0.3% from June to July and rose 4.3% from July last year.
Price gains for used cars and trucks, which made up a large portion of the inflation boost in recent months, increased 0.2%. Although an increase, it was a sharp fall from the 10.5% increase recorded in June, Meanwhile, prices for airline fares also edged lower, down 0.1%.
Gennadiy Goldberg, an interest rate strategist at TD Securities in New York, said:
“At the end of the day this is a more moderate reading than expected, especially on the core,”
Market analysts had forecast the overall CPI would increase 0.5% and the core CPI would increase.
Businesses Raise Prices as Material Shortages Bite
Supply constraints and surging demand have seen businesses in the US, the world’s largest economy, are raising prices for goods and services as cost pressures continue to mount.
Materials shortages, shipping bottlenecks, and hiring difficulties are continuing to be a thorn on the side of businesses recovering from the pandemic. The shortages, bottlenecks, and hiring issues will likely continue to add general upward pressure on consumer prices in the coming months ahead.
