Consumer prices defied forecasts and remained elevated in July, according to the latest data from the Bureau of Labor Statistics… (BLS)
- M-O-M: The Consumer Price Index for All Urban Consumers increased 0.5% in July on a seasonally adjusted basis after rising 0.9 percent in June
- Y-O-Y: Over the last 12 months, the all items index stayed elevated at 5.4% missing forecasts that had it falling to 5.3%.
NOTE: The index for all items less food and energy actually saw its growth rate fall slightly to 4.3% over the last 12 months from 4.5% in June.
Consumer prices remain elevated in almost every category, but we did see some slowing down in July…
- Oil prices continue to lead the way with an annualized price jump of 41.8% followed by used cars/trucks (+41.7%), commodities (+8.5%), and new vehicles and transportations services (+6.4% ).
- Transportation services saw the biggest drop in growth rate month-over-month with a 173% decline followed by apparel (-100%), used cars/trucks(-98%), commodities (-77%), and services (-25%)
NOTE: Heather Long from the Washington Post said on Twitter, “Yes, some of this is short-lived problems. Used car prices are up ~42%(!), but note that shelter costs and restaurant prices are also moving up.”
While it is hopeful that the growth for some major categories saw a decline, it wasn’t enough to have a significant impact on the overall inflation rate. We are getting to the year-over-year point that it is hard to claim the base effect is the reason for higher prices. If inflation remains elevated the Fed will be forced to act whether the labor markets agree or not.