US consumer inflation records smallest annual rise since 2021; up 2.9% YoY
US consumer inflation eased slightly in July, according to government data published Wednesday, its smallest 12-month increase since March 2021 and a positive sign for the Federal Reserve as it weighs cutting interest rates.
The consumer price index (CPI) rose 2.9 percent last month from a year ago, the Labor Department said in a statement, while a measure that strips out volatile food and energy costs cooled to an annual rate of 3.2 percent.
This was slightly lower than the median forecast of economists surveyed by Dow Jones Newswires and The Wall Street Journal.
The monthly inflation rate picked up by 0.2 percent after declining in June, in line with expectations.
Almost 90 percent of the monthly increase was down to a 0.4 percent increase in shelter costs, the Labor Department said. Energy prices remained unchanged, while the index for food rose 0.2 percent.
So-called «core» inflation, excluding volatile food and energy prices also eased last month to 3.2 percent — its lowest level since April 2021.
The July CPI data are good news for US Federal Reserve as it weighs the right time to start bringing interest rates down from a 23-year high.
The US central bank has been attempting to lower inflation to its long-term target of two percent without crashing the economy or causing a surge in the unemployment rate.
Fed chair Jerome Powell suggested last month that the policymakers could cut rates «as soon as» September, if the data continue to come in as expected.
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