US Consumer Price Index below par in July

News


11 Aug, 2017

US Consumer Price Index below par in July

Following June's lacklustre performance, US consumer prices remained soft in July, inching up by just 0.1% last month.

Core inflation, which excludes volatile energy and food changes, was also up a slight 0.1 percent in July. Economists polled by Reuters had initially predicted US consumer prices to inch up 0.2% month-on-month increase.

The less than expected rise was compounded by declines for hotel stays and consumer cell phone plans. However, this was somewhat offset by higher costs for medical and clothing.

Now, the underwhelming results will surely raise more questions as to whether inflation will eventually rise to hit the Federal Reserve's 2% annual rate target. Overall, consumer prices remained at a 1.7% annual rate, the same rate as in May and June.

"The CPI data was very muted and not something which the Fed is going to be happy to look it", said Naeem Aslam, chief market analyst at Think Markets UK Ltd, in an email note. The U.S. dollar sunk after the report; U.S. stock futures suggested a steady start for the Dow Jones Industrial.

The Fed has raised interest rates twice this year, and there is speculation that the bank will lift rates again before the end of 2017.

Today's News - London looks to maintain title as Europe's tech hub