There’s good news and bad news in the Labor Department’s July Consumer Price Index (CPI). Overall inflation rose just 0.2% during the month, resulting in an annual inflation of rate of 2.9%, approaching the Federal Reserve’s target of 2%.
But the cost of putting a roof over your head – the shelter index – rose 0.4% and is up 5.1% over the last 12 months. The Bureau of Labor Statistics said the cost of shelter contributed 90% of July’s overall increase.
Breaking down the shelter number, rent of primary residence was the big driver. It increased 0.5% from June to July and is up 5.1% year-over-year.
But homeowners also saw their costs go up. Owners equivalent rent of residence rose 0.4% and is 5.3% higher over the last 12 months.
Food prices also rose last month but at a slower rate. Food consumed at home – generally the category for grocery prices – rose 0.1%, with prices 1.1% higher on the year.
Meat, fish, poultry and egg prices posted the largest gains, rising 0.7% from June to July, with prices up 3% year-over-year. At the same time, the price of dairy products went down 0.2% in July and is down by the same amount over the last 12 months.
But restaurant prices keep rising faster
The price of food consumed away from home – mainly at restaurants – continues to rise at a much faster pace. That index rose at a slightly slower pace in July – 0.2% – but is up 4.1% year-over-year.
Consumers continued to find relief at the gas pump. The gasoline index didn’t rise from June and is down 2.2% over the last 12 months. Electric bills, however, are up nearly 5% over the last 12 months.
The price of new and used vehicles is in a virtual free-fall after reaching record highs in 2023. The new vehicle index is down 1% from 2023 while the used car index has fallen by 10.9% over the same period.