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11:10, 12-Aug-2017
US inflation remains soft in July, CPI shows
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The US consumer prices remained soft for the fifth straight month in July, raising more questions about whether inflation will eventually rise to hit the Federal Reserve’s 2 percent annual rate target.
Consumer Price Index (CPI), a main gauge of inflation, edged up 0.1 percent on a seasonally adjusted basis in July, compared to zero growth in the previous month, the Labor Department on Friday said.
On a year-on-year basis, the index increased 1.7 percent, slightly higher than the 1.6 percent growth in June.
AFP Photo
AFP Photo
Food index went up 0.2 percent, compared to zero growth in June. The energy index fell 0.1 percent in the month following a 1.6 percent decline in June.
Excluding the volatile food and energy categories, the core CPI went up 0.1 percent in July on a seasonally adjusted basis, and was up 1.7 percent over the year, the same growth as in June.
“The CPI data was very muted and not something which the Fed is going to be happy to look at,” Naeem Aslam, chief market analyst at Think Markets UK Ltd said.
The US core CPI went up 0.1 percent in July on a seasonally adjusted basis, and was up 1.7 percent over the year, the same growth as in June. /MarketWatch Data
The US core CPI went up 0.1 percent in July on a seasonally adjusted basis, and was up 1.7 percent over the year, the same growth as in June. /MarketWatch Data
The muted inflation pressure might complicate the Fed's interest rate hike decisions. Some Fed officials expected the inflation will rise in the future with the tightening labor market and supported the central bank to continue to raise interest rates gradually.
However, some remained cautious about the rate hikes and said that the impact from the tightening labor market on inflation might be limited.
Despite the weak inflation, the Fed is expected to start to wind down its 4.5-trillion-US dollar balance sheet in September.
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