#CPIWatch โ July CPI Holds Steady, But Core Costs Climb
Key Highlights:
Monthly CPI: Up 0.2% in July (seasonally adjusted), following a 0.3% gain in June
Annual CPI: +2.7% year-over-yearโstill above the Fedโs 2% target
Core Inflation (Ex-Food & Energy):
+0.3% month-over-month
+3.1% year-over-yearโa reminder that price pressures linger
Notable Category Moves:
Food: Flat in July. โFood at homeโ dipped slightly, while โfood away from homeโ rose 0.3%
Energy: Down 1.1%, led by a 2.2% drop in gasoline prices
Shelter: Solid contributor with a 0.2% rise, including 0.3% increases in rent and ownersโ equivalent rent
Other sectors: Medical care, airline fares, recreation, used vehicles, and furnishings roseโcommunications and lodging eased
Why It Matters:
Core inflation remains uncomfortably strong at 3.1%โwell above the Fedโs long-term goal.
The stable headline CPI gives markets some breathing room, but not enough to ease away policy concerns entirely.
Continued upward pressure on essentials like rent, health care, and used cars signals that inflation isnโt going away anytime soon.
TL;DR
Headline CPI: +0.2% MoM / +2.7% YoY
Core CPI: +0.3% MoM / +3.1% YoY
Prices may cool in some areas, but core costs are flashing red. The Fedโs puzzle isnโt solved yet.
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