Inflation rises to 3.2 percent – the first rise in consumer prices in more than a year – as rent and groceries continue to weigh on households
US inflation has risen to an annual rate of 3.2 percent — a slight increase in July from June’s 3 percent annual increase.
It is the first time in 13 months that the pace of annualized consumer price increases is accelerating.
However, the latest consumer price index released by the Bureau of Labor Statistics on Thursday showed that monthly price increases remained modest.
Inflation grew 0.2 percent in July – just as fast as in June – which could potentially prevent the Federal Reserve from raising interest rates again in September.
This monthly increase was in line with forecasts, while the annual rate was slightly below the forecast 3.3 percent.
The annual inflation rate of 3.2 percent is a sharp decline from last June’s peak of 9.1 percent, but is still well above the Federal Reserve’s target rate of 2 percent.
After suspending rate hikes in June for the first time in 15 months, the central bank made a unanimous decision in July to raise rates again, pushing benchmark borrowing costs to their highest levels in more than two decades.
In a much-anticipated move, the Fed hiked interest rates to 5.25 to 5.5 percent – a range not seen since early 2001 – as part of its aggressive effort to curb inflation.
According to the Bureau of Labor Statistics, the increase in inflation in July was mainly due to housing costs, which include rent. They accounted for 90 percent of the monthly increase.
The food index also rose 0.2 percent in July after rising 0.1 percent in the previous month. They also rose by 4.9 percent last year – as food prices continue to weigh on households.
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