The annual inflation rate in the United States rose to 3.2% in July, according to data released Thursday by the U.S. Bureau of Labor Statistics (BLS). The Consumer Price Index for All Urban Consumers (CPI-U), a primary measure of inflation, increased 0.2% on a seasonally adjusted basis during the month, matching the rise recorded in June.
The report provides key economic data considered by policymakers, including officials at the Federal Reserve, when making decisions regarding monetary policy and interest rates.
The largest contributor to the monthly increase was the index for shelter, which rose 0.4% in July. The BLS stated that the shelter index was responsible for over 90% of the total monthly increase in all items. Other indexes with notable increases included motor vehicle insurance, which rose 2.0%, and the food index, which increased by 0.2%.
The energy index saw a 0.1% increase in July after declining in previous months. Within the energy component, gasoline prices rose 0.2%, while the natural gas index fell by 2.0%.
A separate metric closely watched by economists, the core CPI, which excludes the more volatile food and energy categories, also increased by 0.2% in July. This was the same rate of increase as in May and June. Over the past 12 months, the core CPI has risen 4.7%, a slight deceleration from the 4.8% annual rate reported in June.
The data showed price decreases in several areas. The index for used cars and trucks fell by 1.3%, marking its second consecutive monthly decline. Airline fares decreased by 8.1% in July, the fourth straight month of decline for that category.
On an annual basis, the all-items index increase of 3.2% for the 12 months ending in July was a slight acceleration from the 3.0% annual figure reported in June.
Following the release of the report, the White House issued a statement from President Joe Biden, which noted, “Annual inflation has fallen by around two-thirds since last summer, and inflation is now at its lowest level in more than two years.”
Federal Reserve officials have not made public statements directly responding to the July CPI report. The central bank’s next policy meeting is scheduled for September, where it will review this and other economic data to determine its next steps regarding the federal funds rate.
