US headline CPI down to 2.9% in July, lowest since March 2021 and lower than the expected 3%. Meanwhile, core CPI, which strips out food and energy prices, rose 3.2% annually, matching market expectations, according to the latest readings from the Bureau of Labor Statistics.
Core CPI saw further encouraging signs of inflation normalizing in the three months to July, as the three-month annualized inflation dropped to 1.58%, lowest since Feb 2021.
Monthly rate of increase for core CPI was 0.165% in July, which is the growth rate which is consistent with 2% annual growth rate.
Shelter cost continued its more-gradual-than expected slowdown in annual rate, dropping to 5.05% in July. Nonetheless, rent actually increased in both yearly and monthly terms for the month — year-over-year up from 5.075% to 5.089%, while month-over-month increased from 0.261% to 0.488%.
The increase in shelter index contributed more than 70% of the increase in core inflation, according to the BLS.
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