WASHINGTON–Consumer prices were up 2.7% in July from a year earlier, according to new data from the Labor Department, which is unchanged from June’s gain of 2.7%.
The data further show that prices excluding food and energy categories—the so-called core measure economists watch in an effort to better capture inflation’s underlying trend—rose 3.1% over the past 12 months, above forecasts for a 3% increase.
“July prices increased in line with expectations, with items most likely to be impacted by tariffs either rising at a slower rate or remaining flat compared to June’s print,” said Dawit Kebede, senior economist with America’s Credit Unions. “Core prices increased primarily due to services such as transportation and medical care. Given the weakening labor market and restrictive monetary policy, the Federal Reserve will most likely cut rates in September. Markets are already pricing in a higher probability of this move.”
Specific Categories
The new Labor Department data show:
- Energy prices declined 1.1% compared with June, with gasoline down 2.2%.
- Groceries fell 0.1%.
- Rent returned to a more normal 0.3% increase after a period of big jumps.
- Furniture prices rose 0.9%, tires rose 1% and pet products rose 0.5%.
