Inflation Remains High At 8.5% As Demand For Gas Wanes

The Consumer Price Index for All Urban Consumers (CPI-U) was unchanged in July on a seasonally adjusted basis after rising 1.3 percent in June, the U.S. Bureau of Labor Statistics reported today.Over the last 12 months, the all items index increased 8.5 percent before seasonal adjustment.

The gasoline index fell 7.7 percent in July and offset increases in the food and shelter indexes, resulting in the all items index being unchanged over the month. The energy index fell 4.6 percent over the month as the indexes for gasoline and natural gas declined, but the index for electricity increased. The food index continued to rise, increasing 1.1 percent over the month as the food at home index rose 1.3 percent.

The index for all items less food and energy rose 0.3 percent in July, a smaller increase than in April, May, or June. The indexes for shelter, medical care, motor vehicle insurance, household furnishings and operations, new vehicles, and recreation were among those that increased over the month. There were some indexes that declined in July, including those for airline fares, used cars and trucks, communication, and apparel.

The all items index increased 8.5 percent for the 12 months ending July, a smaller figure than the 9.1-percent increase for the period ending June. The all items less food and energy index rose 5.9 percent over the last 12 months. The energy index increased 32.9 percent for the 12 months ending July, a smaller increase than the 41.6-percent increase for the period ending June. The food index increased 10.9 percent over the last year, the largest 12-month increase since the period ending May 1979.

Food

The food index increased 1.1 percent in July; this was the seventh consecutive monthly increase of 0.9 percent or more. The food at home index rose 1.3 percent in July as all six major grocery store food group indexes increased. The index for nonalcoholic beverages rose the most, increasing 2.3 percent as the index for coffee rose 3.5 percent. The index for other food at home rose 1.8 percent,
as did the index for cereals and bakery products. The index for dairy and related products increased 1.7 percent over the month. The index for meats, poultry, fish, and eggs rose 0.5 percent in July after declining in June. The index for fruits and vegetables also increased 0.5 percent over the month.

The food away from home index rose 0.7 percent in July after rising 0.9 percent in June. The index for limited service meals increased 0.8 percent and the index for full service meals increased 0.6 percent over the month.

The food at home index rose 13.1 percent over the last 12 months, the largest 12-month increase since the period ending March 1979. The index for other food at home rose 15.8 percent and the index for cereals and bakery products increased 15.0 percent over the year. The remaining major grocery store food groups posted increases ranging from 9.3 percent (fruits and vegetables) to 14.9 percent (dairy and related products).

The index for food away from home rose 7.6 percent over the last year. The index for full service meals rose 8.9 percent over the last 12 months, and the index for limited service meals rose 7.2 percent over the last year.

Energy

The energy index fell 4.6 percent in July after rising 7.5 percent in June. The gasoline index fell 7.7 percent over the month following an 11.2-percent increase in June. (Before seasonal adjustment,gasoline prices fell 7.7 percent in July.) The index for natural gas declined in July after sharp recent increases, falling 3.6 percent. However, the electricity index increased in July, rising 1.6 percent, its third consecutive monthly increase of at least 1.3 percent.

The energy index rose 32.9 percent over the past 12 months. The gasoline index increased 44.0 percent over the span and the fuel oil index rose 75.6 percent. The index for electricity rose 15.2 percent, the largest 12-month increase since the period ending February 2006. The index for natural gas increased 30.5 percent over the last 12 months.

All items less food and energy

The index for all items less food and energy rose 0.3 percent in July after increasing 0.7 percent in June. The shelter index continued to rise but did post a smaller increase than the prior month,increasing 0.5 percent in July compared to 0.6 percent in June. The rent index rose 0.7 percent inJuly and the owners’ equivalent rent index rose 0.6 percent. The index for lodging away from home continued to decline, falling 2.7 percent in July after a 2.8-percent decrease in June.

The medical care index rose 0.4 percent in July after rising 0.7 percent in June as major medical care component indexes continued to increase. The index for hospital services increased 0.5 percent over the month, while the indexes for physicians’ services and for prescription drugs both increased 0.3 percent in July.

The index for motor vehicle insurance continued to increase, rising 1.3 percent in July after
increasing 1.9 percent in June. The index for household furnishings and operations rose 0.6 percent after increasing 0.4 percent in June. The new vehicles index also increased 0.6 percent in July,and the recreation index rose 0.3 percent over the month. Other indexes that increased in July include personal care (+0.4 percent), alcoholic beverages (+0.5 percent), tobacco (+0.3 percent),and education (+0.1 percent).

The index for airline fares fell sharply in July, decreasing 7.8 percent. The index for used carsand trucks also declined over the month, falling 0.4 percent after rising in May and June. Thecommunication index fell 0.4 percent in July, and the apparel index fell 0.1 percent after rising the prior two months.

The index for all items less food and energy rose 5.9 percent over the past 12 months, the sameincrease as the period ending June. The shelter index rose 5.7 percent over the last year, accounting for about 40 percent of the total increase in all items less food and energy. Severaltransportation indexes also rose notably over the last year, including new vehicles (+10.4 percent),used cars and trucks (+6.6 percent), motor vehicle insurance (+7.4 percent), and airline fares(+27.7 percent).

Not seasonally adjusted CPI measures

The Consumer Price Index for All Urban Consumers (CPI-U) increased 8.5 percent over the last 12months to an index level of 296.276 (1982-84=100). For the month, the index was unchanged prior toseasonal adjustment.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) increased 9.1 percentover the last 12 months to an index level of 292.219 (1982-84=100). For the month, the index declined 0.1 percent prior to seasonal adjustment.

Source:BLS

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