It is the first time in 13 months that the Consumer Price Index has accelerated on a yearly basis.
Prices rose 0.2 percent on a monthly basis, driven mainly by shelter costs, which include rent. This accounted for 90 percent of the monthly increase, according to the Bureau of Labor Statistics.
However this modest monthly rise is the same rate as in June, which could possibly deter the Federal Reserve from raising interest rates again in September.
The monthly increase was also in line with projections, while the annual rate was slightly below the 3.3 percent forecast.
The 3.2 percent annual inflation rate is a sharp decrease from the 9.1 percent peak seen last June, but is still considerably above the Federal Reserve’s target rate of 2 percent.
After pausing interest rate rises for the first time in 15 months in June, the central bank made the unanimous decision to raise rates again in July – taking benchmark borrowing costs to the highest level in more than two decades.
In a much-anticipated move, the Fed increased rates to between 5.25 and 5.5 percent – a range not seen since early 2001 – as part of its aggressive drive to dampen inflation.
The food index also rose 0.2 percent in July after increasing 0.1 percent the previous month. Over the last year, it also went up by 4.9 percent – as the price of groceries continues to weigh heavily on households…Source – Read More!