U.S. Consumer Inflation Remains Mild in July as Gasoline Prices Decline

U.S. consumer prices rose only slightly in July, supported by another decline in gasoline costs and relatively moderate underlying inflation. The latest data reduced expectations of an interest rate increase by the Federal Reserve at its September meeting.

The Consumer Price Index increased 0.1% in July after falling 0.4% in June, according to the Labor Department's Bureau of Labor Statistics. The June decline had been the first monthly drop in six years.

Shelter prices rose 0.1% and accounted for about two-thirds of the overall CPI increase. Hotel and motel prices fell 3.3%, partly offsetting a 0.3% increase in owners' equivalent rent.

Gasoline prices declined 2.9% following a 9.7% drop in June. Food prices increased 0.1%, while grocery prices fell 0.1%. Pork prices dropped 1.5%, while ground beef prices declined 1.6%. Despite the monthly decline, ground beef prices remained 9.0% higher than a year earlier.

Over the 12 months through July, consumer prices increased 3.4%, compared with a 3.5% rise in June. The Federal Reserve's inflation target is 2%.

Excluding food and energy, core CPI increased 0.2% in July after remaining unchanged in June. Healthcare prices rose 0.4%, while airline fares increased 2.2%. Prices for information technology commodities also increased, with computers, peripherals and smart home assistants recording a 3.5% rise.

Core goods prices increased 0.2% after declining for the previous two months. Apparel prices, household furnishings and supplies also recorded modest increases.

The latest inflation figures came after July job-loss data surprised economists. Economists expect inflation to increase somewhat in August because of higher oil prices, while job growth is expected to recover as seasonal effects fade.