July CPI Rises 3.4% as Energy Costs Stay Elevated — SkimNews
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- July CPI rose 3.4% year-over-year, down from 3.5% in June and marking the first decline in the annual rate since January, according to the Bureau of Labor Statistics
- Energy prices surged 14.7% year-over-year, with gasoline up 24.6% and fuel oil up 39.1%, amid doubts the U.S. and Iran can reach a broader conflict resolution
- Gasoline averaged $4.04 per gallon nationally as of Wednesday, up from $3.14 a year ago, according to AAA
- Airline fares climbed 25.5% over the past 12 months, per the CPI data
- Food prices rose 3% annually, with food at home up 2.7%; meat was way up, chicken slightly down, and egg prices finally falling, according to Boston College's Brian Bethune
- Core CPI, excluding food and energy, rose 2.5% year-over-year, with new vehicles, apparel, and shelter all posting modest increases
- The Federal Reserve held its benchmark rate at 3.5%-3.75% last month, and experts say a September rate hike is possible but an October move is more likely, with Federated Hermes' Karen Manna describing policymakers as in 'wait-and-see mode'
Why it matters: With core CPI at 2.5% and headline at 3.4%, the Fed remains above its 2% target, keeping borrowing costs elevated for households. A September rate hike stays on the table, but October is more likely as policymakers want a 'clear and lasting trend' before acting. Consumers continue absorbing 14.7% annual energy inflation even as food and core categories moderate.
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