July CPI Inflation Rose to 3.2%, Less than Predicted

On 10 August 2023, Thursday, the US Bureau of Labor Statistics (BLS) reported CPI inflation rose 3.2%, from a year ago in July. However, the reading came slightly lower than the market expectations of 3.3%. Further, the core CPI which excludes energy prices and volatile food, upsurge 0.2% from June hitting 4.7%.

What is Current CPI Inflation Saying?

For the first time in the past year, the speed of consumer prices skyrocketed on an annual basis. The CPI upsurge by 3.2% reflecting that the inflation has lost at least some of its hold on the US economy. On Thursday, a report by BLC confirmed the same. However, the annual rate was a bit below the 3.3% predicted, though higher than in June. Also, an upsurge of 0.2% is observed in the Core CPI for the month. The annual rate for the Core CPI was slightly below the estimated rate of 4.8%, expected by Dow Jones.

The shelter costs are mainly accountable for the scenario as most of the monthly inflation hikes come from shelter costs, which rose 0.4% and were up 7.7% from a year ago. “90% of the hikes come from the shelter category and hold around one-third of the CPI weighting”, stated BLS. The food and energy sector also made their contribution to the rates, BLC added.

Food prices hit around 0.2% on the month whereas the energy prices enhanced around 0.1%, although the prices of crude oil upsurge during the month. The report also represented the ups and downs occurring in the used vehicles, airlines, and medical care services. The medical care services declined by 0.4% and the used vehicle prices were off by 0.4%. Also, the Airline fare went down by 8.1% in the month. The report data has the potential to alter the manner in which markets price the Fed’s rate outlook and notably influence the USD’s valuation.

“The annual inflation has been falling since last summer. Progress is made by the US along with sustaining the broad strength of the economy” said Joe Baiden after the report was released.

Unemployment rates remained low, shares of working-age Americans increased, and real wages for Americans are booming and are much higher than they were before the pandemic, he added.

What is Expected in the Next Report?

The monthly Core CPI and CPI experienced a rise of 0.2% in July and are expected to react more likely to change in the upcoming monthly figures. Fe Governor, Michelle Bowman expected an additional rate increase if data show that progress on inflation has been avoided. “We are making a growth against inflation and are committed to taking inflation back to the expected target”, stated Patrick Harker, Philadelphia Fed President.

Conclusion

US BLS reported CPI Inflation rose 3.2% for the first time in the past 12 months. The food, energy, and shelter prices contributed a lot to the change. Effective growth is marked against inflation and is expected to reach the set target soon.

Andrew is a blockchain developer who developed his interest in cryptocurrencies while his post-graduation. He is a keen observer of details and shares his passion for writing along with being a developer. His backend knowledge about blockchain helps him give a unique perspective to his writing