You are here

LATEST US DATA

US consumer prices accelerate in July

Washington

US consumer prices rose in July by more than expected on a jump in auto and apparel costs, though inflation remained broadly muted as the pandemic suppressed demand.

The consumer price index rose 0.6 per cent from the prior month, following a 0.6 per cent gain in June, Labor Department figures showed on Wednesday. The median forecast in a Bloomberg survey of economists called for a 0.3 per cent increase. Compared with a year earlier, the gauge increased one per cent, after June's 0.6 per cent rise.

Excluding volatile food and fuel costs, the so-called core CPI - viewed by policymakers as a more reliable gauge of price trends - rose 0.6 per cent from the prior month, the biggest jump in almost three decades, after a 0.2 per cent increase in June. On an annual basis, core inflation measured 1.6 per cent, a four-month high, following 1.2 per cent in June.

The gain in consumer prices reflects the rebound in demand for goods and services from the depths of the pandemic-induced lockdowns earlier this year, suggesting inflation is closer than thought to returning to the pre-crisis pace.

Your feedback is important to us

Tell us what you think. Email us at btuserfeedback@sph.com.sg

Federal Reserve policymakers have seen little threat of inflation and expect to hold interest rates near zero for the foreseeable future, though investors in Treasuries have signalled they expect price gains to pick up amid extended monetary stimulus.

Prices for clothing rose 1.1 per cent after a 1.7 per cent jump in June, while used cars rose 2.3 per cent, the most since early 2010. New vehicles also increased 0.8 per cent, the biggest gain in nine years.

Car insurance costs posted a record monthly increase of 9.3 per cent following company rebates in prior months that accounted for less driving.

Airfares also posted the biggest monthly gain in 21 years, though prices remained 23.7 per cent below year-earlier levels with passenger counts still depressed. BLOOMBERG

BT is now on Telegram!

For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes