The consumer price index ticked upwards for the first time in a year
The US’s inflation rate jumped in July for the first time in 12 months as housing costs surged, although the pace of core inflation was its slowest for nearly two years.
The government said on Thursday that annual consumer price growth increased by 3.2% last month, rising from 3% in June as core inflation posted a tiny 0.2% monthly upswing.
That overall inflation increase was also impelled by higher food costs, according to the Labor Department – but the slight CPI jump still means inflation remains well below its 9.1% high from last year.
The news arrives in a further sign that the Federal Reserve’s series of interest rate hikes are having an impact in cooling the economy, with the central bank’s benchmark rate sitting at 5.25% – its highest level for 22 years, following 11 straight increases since March 2022.
Still, inflation remains persistent in service businesses where wages account for a high share of costs, while average hourly wage growth continues to be elevated at 4.4%.
That’s likely to keep rates elevated for a prolonged period, with little sign that the Fed is eyeing a cut in the coming months.
The latest figures came as no surprise to observers, with both headline and core inflation falling in line with Wall Street expectations.
