US consumer prices rise moderately in July; weekly jobless claims above expectations
WASHINGTON (Reuters) — U.S. consumer prices increased moderately in July amid lower costs for goods, including used motor vehicles, a trend that could persuade the Federal Reserve to leave interest rates unchanged next month.
The CPI rose 0.2% last month, matching the gain in June, the Labor Department said on Thursday. Though the increase in the annual CPI rate picked up for the first time in 13 months, that was because it was calculated from a lower base after prices subsided last July following a jump that had boosted inflation to a pace not seen in more than 40 years.
The CPI advanced 3.2% in the 12 months through July. That followed a 3.0% rise in June, which was the smallest year-on-year gain since March 2021.
Annual consumer prices have come down from a peak of 9.1% in June 2022. The Fed has a 2% inflation target.
Economists polled by Reuters had forecast the CPI would rise 0.2% last month and by 3.3% on a year-on-year basis.
«Overall, the trend in inflation is more firmly on a downward path than at the start of the year,» said Sam Bullard, a senior economist at Wells Fargo (NYSE:WFC) in Charlotte, North Carolina. «While headline inflation has made quick work of getting back to low single digits, the year-over-year pace is likely to get stuck around 3% through the end of the year. This would keep a sustained return to the Fed's target in the distance.»
The CPI report on Thursday is one of two before the U.S. central bank's Sept. 19-20 policy meeting. Financial markets overwhelmingly expect the Fed to leave its policy rate unchanged at that meeting, according to CME Group's (NASDAQ:CME) FedWatch tool. Since March 2022, the Fed has raised its benchmark overnight interest rate by 525 basis points to the current
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