U.S. consumer prices rose 0.1% in July and 3.4% from a year earlier.
Core inflation increased 0.2% for the month and slowed to 2.5% annually.
Lower gasoline prices helped contain inflation, while shelter accounted for roughly two-thirds of July’s overall increase.
U.S. consumer prices rose modestly in July, while annual inflation eased slightly as falling gasoline prices offset higher costs for shelter, restaurant meals, and several services.
The Consumer Price Index increased a seasonally adjusted 0.1% in July after declining 0.4% in June, according to the July report from the Bureau of Labor Statistics. Compared with a year earlier, prices were up 3.4%, down from a 3.5% annual increase in June.
Shelter costs rose 0.1% and accounted for roughly two-thirds of the monthly increase in the overall index. Both rent and owners’ equivalent rent — a measure of what homeowners would pay to rent their properties — advanced 0.3%. Lodging away from home, however, fell 2.8%.
Core CPI, which excludes the often-volatile food and energy categories, rose 0.2% after being unchanged in June. Core prices increased 2.5% over the preceding 12 months, easing from 2.6% in June.
Lower energy prices
Energy prices declined 1.5% in July, their second consecutive monthly drop. Gasoline prices fell 2.9% on a seasonally adjusted basis, while natural gas prices increased 0.7% and electricity costs edged up 0.1%.
Despite the recent monthly declines, energy remained a significant source of annual inflation. The energy index was 14.7% higher than a year earlier, driven largely by a 24.6% rise in gasoline prices. Fuel-oil prices were up 39.1% over the same period.
Food prices increased 0.1% in July and 3% from a year earlier. Grocery prices slipped 0.1% during the month, helped by a 0.7% decline in the meats, poultry, fish, and eggs category. Pork prices fell 1.5%, while lettuce prices plunged 16.4% — largely due to the Cyclospora outbreak.
Dining out got more expensive
The cost of eating out continued to rise. Food-away-from-home prices increased 0.3% in July, with limited-service meals up 0.4% and full-service meals up 0.2%. Restaurant prices were 3.4% higher than a year earlier.
Several service categories also became more expensive. Medical-care prices rose 0.4%, including a 0.5% increase in hospital services. Airline fares climbed 2.2%, communication costs increased 0.6%, and education prices advanced 0.5%.
Prices for used cars and trucks rose 0.4%, while new-vehicle prices edged up 0.1%. Motor-vehicle insurance provided some relief, declining 0.3% after falling 2% in June.
Over the past year, shelter costs increased 3.2%, while airline fares surged 25.5%. Prices for services excluding energy services rose 3%, compared with a 0.8% increase for commodities excluding food and energy commodities.