by Alexander W. Salter
The American Institute for Economic Research
After slight deflation in June, prices once again ticked up in July. The Bureau of Labor Statistics reported that the Consumer Price Index (CPI) rose 0.2 percent last month, for a year-over-year increase of 2.9 percent. Core CPI, which excludes volatile food and energy prices, also rose 0.2 percent on the month, and has risen 3.2 percent year-over-year.
The annualized monthly inflation rate was 1.9 percent in July. The annualized monthly core inflation rate was 2.0 percent. Taken together, inflation appears to be in line with the Federal Reserve’s official 2-percent target.
Shelter prices saw the largest increase. They rose 0.4 percent on the month, “accounting for nearly 90 percent of the monthly increase in the all items index.” The estimated increase in the shelter component of CPI, however, likely reflects price pressure from a year or more ago. As Treh Manhertz at Zillow shows, “annualized changes in shelter CPI can remain elevated long after rent price growth cools.”