U.S. Consumer Price Inflation Eases in July

The Consumer Price Index increased 0.2% in July after rising 0.3% in June and 0.1% in May. The July increase matched the forecast in the Action Economics Forecast Survey. The 2.7% y/y increase in the headline CPI in July held steady with June, but was increased from 2.3% in April. It remained below the 9.1% peak in June 2022. The CPI excluding food & energy increased an expected 0.3% last month after a 0.2% June rise and a 0.1% uptick in May. The 3.1% y/y July rise compared to 2.8% from March through May, still well below the 6.6% peak in September 2022.

Energy prices declined 1.1% (-1.6% y/y) last month after rising 0.9% in June. Gasoline prices weakened 2.2% (-9.5% y/y) after rising 1.0% in June. Fuel oil prices improved 1.8% (-2.9% y/y) after rising 1.3% in May. Natural gas prices fell 0.9% (+13.8% y/y) following a 0.5% gain, and electricity prices eased 0.1% (5.5% y/y) after rising 1.0% in June.

Food prices held steady in July (+2.9% y/y) following two straight 0.3% increases. Egg prices fell 3.9% (+16.4% y/y), off for the fourth straight month. Meat, poultry & fish prices rose 0.7% (4.6% y/y) after increasing 0.8%, while dairy product prices gained 0.7% (1.5% y/y), after easing in four of the last five months. Cereal & bakery product costs eased 0.2% (+1.0% y/y) for the second straight month while fruit & vegetable prices held steady (0.2% y/y), following a 0.9% gain. Nonalcoholic beverage prices declined 0.5% (+3.6% y/y) in July after rising 1.4% in June.

Goods prices less food and energy rose 0.2% in July for the second straight month. The 1.2% y/y price gain is up from slight y/y declines in the first three months of this year. Prices of used cars and trucks rose 0.5% (+4.8% y/y) last month, after falling 0.7% in June, while new vehicle costs held steady (+0.4% y/y) after falling 0.3% for two consecutive months. Apparel prices edged 0.1% higher (-0.2% y/y) in July after rising 0.4%. Appliance prices fell 0.9% (-0.3% y/y), after strengthening 1.9%. Home furnishings prices increased 0.7% (2.4% y/y) after rising 1.0%. Recreation product costs rose 0.4% (-0.1% y/y) in July, after a 0.8% increase. Education & communication product costs declined 1.3% (-4.3% y/y) after holding steady in June. Medical care goods prices rose 0.1% (NSA, 0.1% y/y) for the second straight month.

Services prices less energy strengthened 0.4% (3.6% y/y) after rising 0.3% in June. Shelter prices rose 0.2% (3.7% y/y), the same as in June, as owners’ equivalent rent of primary residences increased 0.3% (4.1% y/y) for the third straight month. The cost of lodging away from home declined 1.0% (-3.5% y/y), the fifth straight month of decline. Rents of primary residences gained 0.3% (3.5% y/y), after two consecutive 0.2% increases. Transportation service prices jumped 0.8% (3.5% y/y) after gaining 0.2% and the cost of motor vehicle insurance edged up 0.1% (5.3% y/y) in July, the same as in June. Public transportation costs increased 3.0% (0.7% y/y) after rising 0.4% during June. The cost of medical services increased 0.8% (4.3% y/y) after a 0.6% rise, and the cost of recreation services rose 0.4% (3.9% y/y) after rising 0.2% in June. Education & communication services prices rose 0.2% (1.1% y/y) after edging 0.1% higher in June.

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