July US CPI Report Shows Inflation at a 2.9% Annual Rate, Softer Than Expected

The Bureau of Labor Statistics reported that the Consumer Price Index increased 2.9% in July from year-ago levels—a tick downward from June’s 3.0% rate. Core CPI, which excludes volatile food and energy costs, climbed 3.2% over the last 12 months after rising 3.3% in June.

With the July CPI report, the annual inflation rate was at its lowest since March 2021.

The CPI rose 0.2% in July from month-ago levels after falling 0.1% in June. Core CPI also increased 0.2% after rising 0.1% in June. Forecasts had called for the CPI to rise 3% on an annual basis and 0.2% on a monthly basis in July after falling 0.1% in June, according to FactSet’s consensus estimates. Core inflation had been expected to rise slightly to 0.2% on a monthly basis from 0.1% in June, and experience a small dip on an annual basis from 3.3% in June to 3.2% in July.

July CPI Report Key Stats

• CPI climbed 0.2% for the month after falling 0.1% in June.
• Core CPI rose 0.2% after growing by 0.1% in June.
• CPI increased 2.9% year over year after rising by 3.0% the prior month.
• Core CPI climbed 3.2% from year-ago levels after increasing 3.3% in June.

Food prices rose 0.2% in July after growing 0.2% in June. Food-at-home prices increased 0.1% over the month, while food-away-from-home (restaurant) prices rose 0.2%.

Energy prices were mixed overall after falling 2.0% the prior month. Utility (piped) gas service prices decreased 0.7%, fuel oil prices climbed 0.9%, gasoline prices were unchanged, and electricity prices increased 0.1%.

In July, shelter prices rose 0.4% after rising 0.2% in June.