A below-forecast rise in the U.S. cost of living in July added to a string of disappointing readings, potentially putting the Federal Reserve’s inflation goal even further away.
Figures released Friday by the U.S. Labor Department showed the Consumer Price Index rose only 0.1% over June, after being unchanged the prior month; year-to-year, the rate gained 1.7%, compared to the expected 1.8%.
Excluding food and energy, the so-called core CPI rose 0.1% m/m (est. 0.2%); up 1.7% y/y (matching estimates)
The U.S. inflation slowdown may be getting longer, even after most economists and Federal Reserve policy makers judged it to be transitory. A more sustained ebb in price pressures could make it tougher for the central bank to stay on course for one more interest-rate increase this year.
The figures follow data Thursday, showing wholesale prices unexpectedly fell 0.1% in July from the prior month, the first drop in nearly a year, reflecting widespread declines across groups such as chemical wholesalers, retail apparel and airline services.
The Fed targets 2% inflation based on a separate Commerce Department price gauge, which will next be updated on Aug. 31.
