Consumer prices rose 0.2% (2.9% y/y) during July following a 0.1% June increase. The gain matched expectations in the Action Economics Forecast Survey. The CPI excluding food & energy also rose an expected 0.2% (2.4% y/y) for the third straight month.

Last month's CPI increase was led by a 0.3% rise (3.1% y/y) in services prices. Transportation prices rose 0.5% (4.0% y/y) led by a 1.7% strengthening (-1.5% y/y) in the cost of public transportation. Shelter costs increased 0.3% (3.5% y/y) as the owners' equivalent rent of residences also rose 0.3%; the 3.4% y/y rate of increase is up from 3.1% earlier this year. Rent of primary residences also rose 0.3%, but the 3.6% y/y gain is down from 3.9% in the middle of last year. Shelter accounts for a dominant 33% of the total CPI. Education & communication services prices rose 0.4%, and the 1.5% y/y increase compares to last year's decline in costs. Medical care services costs rose 0.1%. The 2.3% y/y gain is half what it was in the middle of 2016. Recreation services prices rose 0.1% (1.8% y/y).

Goods prices excluding food & energy notched 0.1% higher (-0.0% y/y) compared to declines in prices during each of the prior four months. Appliance prices jumped 1.5% (2.8% y/y). New vehicle prices gained 0.3% and the 0.2% y/y gain compares to a 1.6% y/y decline as of June. Recreation goods prices improved 0.2% (-2.7% y/y) following three straight months of decline. Furniture & bedding costs eased 0.1% and were unchanged y/y, but that compares to price deflation during the last several years. Apparel prices eased 0.3% (+0.3% y/y) following a 0.9% decline. Medical care product prices were off 1.1% (+0.4% y/y) and reversed the strength during the prior two months.

Food prices improved 0.1% (1.4% y/y) led by a 1.0% gain (0.9% y/y) in fruit & vegetable prices. That was accompanied by a 0.3% rise (-0.7% y/y) in meat prices which followed two months of decline. These gains were countered by a 0.6% decline (-0.4% y/y) in dairy & related product prices. Egg prices fell 0.2% (+16.7% y/y) following two months of larger decline. Cereal & bakery product prices also eased 0.2% (+0.5% y/y). The cost of eating out rose a strengthened 2.8% y/y.

Energy prices declined 0.5% (+12.1% y/y) as gasoline prices fell 0.6%, but they still were up by one-quarter y/y. Natural gas prices fell 0.5% (-1.3% y/y) and added to declines during the prior four months. Electricity prices fell 0.4% (-0.8% y/y) following a 1.4% decline. Working higher were fuel oil prices by 1.2%; they were up by one-third y/y.

The consumer price data can be found in Haver's USECON database with additional detail in CPIDATA. The Action Economics survey figure is in the AS1REPNA database.