The Labor Department said on Tuesday its
Consumer Price Index edged up 0.1 percent last month after
increasing 0.3 percent in June. In the 12 months through July,
the CPI increased 2.0 percent after advancing 2.1 percent in
June.
Inflation pushed up a bit from March through June, but labor
market slack, marked by tepid wage growth, is keeping a lid on
price pressures. That could add to the view that the U.S.
central bank will be in no hurry to raise its benchmark interest
rate.
The Fed targets 2 percent inflation and it tracks an index that
is running even lower than the CPI.
The Fed last month said the risk of inflation running
persistently below its target had diminished somewhat. It has
kept its overnight lending rate near zero since December 2008
while nursing the economy back to health.
Last month's gain in consumer prices was in line with
economists' expectations.
Energy prices fell broadly after rising in each of the last
three months. Gasoline prices fell 0.3 percent last month after
surging 3.3 percent in June. Food prices increased 0.4 percent
after rising 0.1 percent in June. A drought in California is
driving up food prices.
Stripping out food and energy prices, the so-called core CPI
ticked up 0.1 percent after a similar gain in June. In the 12
months through July, the core CPI increased 1.9 percent after
rising by the same margin in June.
The core CPI was held back by declining prices for used trucks
and a plunge in airline fares. There was a moderate increase in
the cost of prescription medication. Rents rose 0.3 percent in
July and prices for new motor vehicles rebounded 0.3 percent.
(Reporting by Lucia Mutikani; Editing by Paul Simao)
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