Fed's preferred inflation gauge shows a modest rise in latest sign of slowing price increases
An inflation gauge closely tracked by the Federal Reserve remained low last month, adding to signs of cooling price increases and raising the likelihood that the Fed will leave interest rates unchanged when it next meets in late September
WASHINGTON (AP) — An inflation gauge closely tracked by the Federal Reserve remained low last month, adding to signs of cooling price increases and raising the likelihood that the Fed will leave interest rates unchanged when it next meets in late September.
Thursday's report from the Commerce Department showed that prices rose just 0.2% from June to July, the third straight modest increase. Compared with a year earlier, prices rose 3.3% in July, up from a 3% annual increase in June. The year-over-year figure, though, is down sharply from the 7% peak it reached a year ago, though still above the Fed's 2% inflation target. It rose partly because of much smaller price increases a year ago.
Among individual items, the cost of groceries rose just 0.2% from June to July, though they're up 3.5% over the past year. Gas prices increased 0.3% in July but remain 22.3% lower than they were a year earlier.
Among autos, new-car prices edged down 0.1%; they're still up 3.6% from July of last year. Used car prices fell 1.4% from June to July and are down 5.5% compared with 12 months earlier.
