The July inflation report, released today, had no surprises. The overall Consumer Price Index had a .1% increase month-over-month and 3.4% year-over-year. “Core” CPI, which strips out some items that consumers don’t care about, like food and energy (that’s sarcasm), rose .2% month-over-month and 2.5% year-over-year. Shelter costs are heavily weighted in the index and increased .1% in the month. Among items that matter to consumers–shelter, food, energy, medical services, home and auto insurance, utilities–increases over the last year varied, with energy up almost 15%, shelter 3%, food up 3%, electrictricy, which is part of energy overall, is up 4.2%, medical services up 2.7%.
The market expressed some relief, as it makes an interest rate increase by the Federal Reserve less likely. But consumers are still feeling the impact of the increases and have a perception that inflation is an issue, and that their income growth isn’t keeping up. So regardless of the numbers, this will remain an issue. (BLS Release)
