Fed's inflation target elusive as July consumer prices up only 0.1%

Washington

THE cost of living in the US rose in July at the slowest pace in three months, casting doubt on how quickly inflation will return towards the Federal Reserve's goal.

The consumer price index climbed 0.1 per cent after a 0.3 per cent gain the month before, a Labor Department report showed on Wednesday in Washington. The median forecast of 78 economists surveyed by Bloomberg projected a 0.2 per cent increase. Excluding food and fuel, costs also rose less than projected.

Oil has plunged more than 30 per cent from this year's closing peak in June amid a global supply glut that will probably hold down inflation in the coming months. When combined with a stronger dollar and slower growth overseas, the energy slump will make the Fed's price goal…