Key inflation gauge shows price hikes stayed low in July
Thursday's report from the
Among individual items, the cost of groceries rose just 0.2% from June to July, though they're up 3.5% over the past year. Gas prices increased 0.3% in July but remain 22.3% lower than they were a year earlier.
Among autos, new-car prices edged down 0.1%; they're still up 3.6% from July of last year. Used car prices fell 1.4% from June to July and are down 5.5% compared with 12 months earlier.
The latest data follows other recent reports that suggest the economy and the job market may be slowing enough to cool inflation pressures. The number of advertised job openings, for example, tumbled in July, and fewer Americans are quitting their jobs to seek better opportunities. Both trends ease the pressure on companies to raise pay to find and keep workers - a move that tends to perpetuate inflation as employers raise prices to offset their higher labor costs.
Excluding volatile food and energy prices, "core" inflation ticked up just 0.2% from June to July, the same as from May to June. Compared with a year earlier, core prices rose 4.2%, up slightly from 4.1% the previous month.
Economists and
Some economists noted that the increase in year-over-year inflation rates underscored Fed Chair
The inflation gauge that was issued Thursday, called the personal consumption expenditures price index, is separate from the better-known consumer price index. Earlier this month, the government reported that the CPI rose 3.2% in July from a year earlier, down from a peak of 9.1% in
Thursday's report also showed that Americans spent more in July, with consumer spending rising a healthy 0.8% from June to July, up from a 0.5% gain from May to June. The increase suggests that the
Though consumer spending drives most of the
Powell referred to the tricky dynamics surrounding the economy and inflation in his
In
Later in the month, entertainment spending surged, probably reflecting the popularity of the "Barbie" and "Oppenheimer" movie releases, the Institute said.
Those trends might have pulled some spending away from major retailers, some of which reported sharp sales declines in the spring and early summer, including
Economists said last month's jump in consumer spending was driven mainly by one-time factors, that are unlikely to be repeated. Utility spending leapt as hot weather led many Americans to crank up air conditioning. Back-to-school shopping also likely fueled some spending.
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