WASHINGTON (dpa-AFX) - Consumer prices in the U.S. increased in line with economist estimates in the month of July, according to a report released by the Labor Department on Tuesday.
The Labor Department said its consumer price index rose by 0.2 percent in July after climbing by 0.3 percent in June. The modest increase matched expectations.
The annual rate of growth by consumer prices in July was unchanged from the previous month at 2.7 percent, while economists had expected the pace of growth to tick up to 2.8 percent.
The monthly uptick by consumer prices primarily reflected a continued increase by prices for shelter, which rose by 0.2 percent for the second straight month.
Meanwhile, the report said energy prices slumped by 1.1 percent in July after growing by 0.9 percent in June amid a 2.2 percent plunge by prices for gasoline.
Food prices were unchanged in July after rising by 0.3 percent in June, as prices for food at home edged down by 0.1 percent but prices for food away from home rose by 0.3 percent.
Core consumer prices, which exclude food and energy prices, climbed by 0.3 percent in July after rising by 0.2 percent in June. The increase by core prices was also in line with estimates.
The annual rate of growth by core consumer prices accelerated to 3.1 percent in July from 2.9 percent in June. Economists had expected the pace of growth to inch up to 3.0 percent.
'Although the Fed supposedly focuses more on the core number than on the headline number (in order to strip out the noisier components of inflation), we don't believe that this report will deter the Fed from cutting rates next month,' said Chris Zaccarelli, Chief Investment Officer for Northlight Asset Management.
He added, 'More importantly, there is one more jobs report (on 9/5) and one more CPI report (on 9/11) before the Fed meets again and those reports will take on even more importance as the Fed decides whether to cut rates to preemptively support the labor market or whether the inflation reports are concerning enough that they feel like they need to sit on their hands and wait.'
The monthly growth by core consumer prices reflected the higher shelter costs as well as increases in prices for medical care, airline fares, recreation, household furnishings and operations and used cars and trucks.
Prices for lodging away from home and communication were among the few that decreased in July, the Labor Department said.
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