Reuters: U.S. consumer prices increased moderately in July, though rising costs for goods because of import tariffs led to a measure of underlying inflation posting its largest gain in six months.
The consumer price index rose 0.2% last month after gaining 0.3% in June, the Labor Department’s Bureau of Labor Statistics said on Tuesday. In the 12 months through July, the CPI advanced 2.7% after rising 2.7% in June. Economists polled by Reuters had forecast the CPI rising 0.2% and increasing 2.8% year-on-year.
Excluding the volatile food and energy components, the CPI rose 0.3%, the biggest gain since January, after climbing 0.2% in June. The so-called core CPI increased 3.1% year-on-year in July after advancing 2.9% in June.
The Federal Reserve tracks different inflation measures for its 2% target. Prior to the CPI data, financial markets expected the U.S. central bank would resume cutting interest rates in September after July’s weak employment report and sharp downward revisions to the nonfarm payrolls counts for May and June.
The Fed left its benchmark overnight interest rate in the 4.25%-4.50% range last month for the fifth straight time since December.
The CPI report was published amid mounting concerns over the quality of inflation and employment reports following cuts in budget and staffing that have led to the suspension of data collection for portions of the CPI basket in some areas across the country.
Those worries were amplified by President Donald Trump firing Erika McEntarfer, the head of the BLS, early this month after stall-speed job growth in July, reinforced by sharp downward revisions to the May and June nonfarm payrolls counts.
