US consumer prices unchanged as cost of fuel falls
The reading was the largest month-on-month deceleration of price increases since 1973 and follows a roughly 20% drop in the cost of fuel
14 August 2022 - 10:52
byAgency Staff
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US consumer prices have been surging due to a number of factors, including snarled global supply chains. Picture: 123RF
US consumer prices were unchanged in July due to a sharp drop in the cost of fuel, delivering the first notable sign of relief for weary Americans who have watched inflation climb over the past two years.
The Consumer Price Index (CPI) was flat last month after advancing 1.3% in June, the Labour Department said in a closely watched report that could allow the Federal Reserve to dial down interest rate hikes in September.
The reading was the largest month-on-month deceleration of price increases since 1973 and follows a roughly 20% drop in the cost of fuel.
Prices at the pump spiked in the first half of this year due to the war in Ukraine, hitting a record-high average of more than $5 (R81) a gallon (just less than four litres) in mid-June, according to the American Automobile Association (AAA).
Aside from its policy meeting next month, the Fed has indicated that several monthly declines in CPI growth would be needed before it lets up on the aggressive monetary policy tightening it has delivered to tame inflation that's running at a four-decade high.
“This is not yet the meaningful decline in inflation the Fed is looking for. But it's a start and we expect to see broader signs of easing price pressures over the next few months,” said Paul Ashworth, chief US economist at Capital Economics.
US consumer prices have been surging due to a number of factors, including snarled global supply chains, huge government stimulus early in the pandemic and Russia's invasion of Ukraine.
Food is one component of the CPI that remained elevated in July, rising 1.1% last month after climbing 1.0% in June.
In the 12 months through July, the CPI increased by a weaker-than-expected 8.5% after a 9.1% rise in June. Underlying inflation pressures, which exclude volatile food and energy components, also showed some green shoots.
The so-called core CPI rose 0.3% after climbing 0.7% in June, but still increased 5.9% in the 12 months through July, matching the pace in June.
Inflation in the cost of rent and owners' equivalent rent of primary residence, which is what a homeowner would receive from renting a home, rose at almost the same pace as in June. Shelter costs comprise about 40% of the core CPI measure.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
US consumer prices unchanged as cost of fuel falls
The reading was the largest month-on-month deceleration of price increases since 1973 and follows a roughly 20% drop in the cost of fuel
US consumer prices were unchanged in July due to a sharp drop in the cost of fuel, delivering the first notable sign of relief for weary Americans who have watched inflation climb over the past two years.
The Consumer Price Index (CPI) was flat last month after advancing 1.3% in June, the Labour Department said in a closely watched report that could allow the Federal Reserve to dial down interest rate hikes in September.
The reading was the largest month-on-month deceleration of price increases since 1973 and follows a roughly 20% drop in the cost of fuel.
Prices at the pump spiked in the first half of this year due to the war in Ukraine, hitting a record-high average of more than $5 (R81) a gallon (just less than four litres) in mid-June, according to the American Automobile Association (AAA).
Aside from its policy meeting next month, the Fed has indicated that several monthly declines in CPI growth would be needed before it lets up on the aggressive monetary policy tightening it has delivered to tame inflation that's running at a four-decade high.
“This is not yet the meaningful decline in inflation the Fed is looking for. But it's a start and we expect to see broader signs of easing price pressures over the next few months,” said Paul Ashworth, chief US economist at Capital Economics.
US consumer prices have been surging due to a number of factors, including snarled global supply chains, huge government stimulus early in the pandemic and Russia's invasion of Ukraine.
Food is one component of the CPI that remained elevated in July, rising 1.1% last month after climbing 1.0% in June.
In the 12 months through July, the CPI increased by a weaker-than-expected 8.5% after a 9.1% rise in June. Underlying inflation pressures, which exclude volatile food and energy components, also showed some green shoots.
The so-called core CPI rose 0.3% after climbing 0.7% in June, but still increased 5.9% in the 12 months through July, matching the pace in June.
Inflation in the cost of rent and owners' equivalent rent of primary residence, which is what a homeowner would receive from renting a home, rose at almost the same pace as in June. Shelter costs comprise about 40% of the core CPI measure.
Reuters
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