CPI Report: Annual Inflation Rate Comes In At 3.4% In July, In Line With Expectations As Energy Prices Ease

• Core CPI, which excludes food and energy, showed a 0.2% increase in July, in line with expectations.
• Easing energy costs led the decline in headline prices, with the energy index down 1.5% in July, following a 5.7% fall in June.
• The BLS report also stated that the gasoline index fell 2.9% in July, while the index for natural gas and electricity edged up by 0.7% and 0.1%, respectively.

U.S. consumer prices inched up in July, according to the Consumer Price Index (CPI) report released on Wednesday, with both headline and core CPI coming in line with forecasts of economists.

Data from the Bureau of Labor Statistics (BLS) showed that CPI rose 0.1% in July on a seasonally adjusted basis, with the annual inflation rate cooling to 3.4% from 3.5% last month.

Core CPI, which excludes food and energy, rose 0.2% in July, in line with expectations, according to MarketWatch data.

On an annual basis, core CPI stood at 2.5%, in line with Wall Street expectations.

Source: Bureau of Labor Statistics, U.S. Department of Labor

Energy Costs Ease

Easing energy costs led the decline in headline prices, with the index for energy declining 1.5% in July, following a 5.7% fall in June.

The BLS report also stated that the gasoline index fell 2.9% in July, while the index for natural gas and electricity edged up by 0.7% and 0.1%, respectively.

Over the 12-month period ending in July, the energy index is up 14.7%, while the gasoline index is up 24.6%.

Food Costs Inch Up

The BLS report also stated that food costs inched up by 0.1% during July after rising 0.2% in June, while the shelter index rose 0.1%.

The indexes for medical care, airline fares, communication, education, and recreation rose in July. However, motor vehicle insurance prices fell during the month, the report stated.

Meanwhile, U.S. equities gained in Wednesday’s pre-market trade. At the time of writing, the SPDR S&P 500 ETF (SPY), which tracks the S&P 500 index, was up 0.42%; the Invesco QQQ Trust ETF (QQQ) rose 0.93%; and the SPDR Dow Jones Industrial Average ETF Trust (DIA) gained 0.22%. Retail sentiment on Stocktwits regarding the S&P 500 ETF was in the ‘neutral’ territory.

The iShares 7-10 Year Treasury Bond ETF (IEF) was up 0.33% at the time of writing.

Editor's Note: The story has been updated to reflect the fall in the annual inflation rate in July.

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