US inflation picks up, but details under the surface are encouraging

economictimes.indiatimes.com:

inflation data offered the latest evidence that price increases were meaningfully cooling, good news for consumers and policymakers alike more than a year into the Federal Reserve's campaign to slow the economy and wrestle cost increases back under control. The consumer price index climbed 3.2% in July from a year ago, according to a report released on Thursday. That was the first acceleration in 13 months, and followed a 3% reading in June.

But that tick up requires context. Inflation was rapid in June 2022 and slightly slower the following month. That means that when this year's numbers were measured against 2022 readings, June looked lower and July appeared higher than if the year-ago figures had been more stable.

Economists were more keenly focused on another figure: the «core» inflation index, which strips out volatile food and fuel prices. That picked up by 4.7% from July 2022, down from 4.8% in June. And on a monthly basis, core inflation roughly matched an encouragingly low pace from the previous month.

The upshot was that inflation continued to show signs of seriously receding after two years of rapid price increases that have bedeviled policymakers and burdened shoppers — and the details of the July report offered positive hints for the future. Rent prices have been moderating, a trend that is expected to persist in coming months and which should help to weigh down inflation overall. An index that tracks services prices outside of housing is picking up only slowly.

«This is continuing the kind of progress I think that you want to see,» said Omair Sharif, the founder of Inflation Insights, a research firm. Airfares fell sharply, and hotel costs eased last month. Big drops in those categories may be difficult to