US consumer prices up 5.4% in July, higher than expectation

By Ovunc Kutlu

ANKARA (AA) - US consumer prices rose 5.4% in July on an annual basis, higher than a projected 5.3%, according to the US Labor Department on Wednesday.

The Consumer Price Index (CPI), which measures changes in the price of goods and services from a consumer perspective, also rose 5.4% in June, marking its largest 12-month increase since August 2008.

In July, the CPI rose 0.5% from the previous month, which came in line with market expectations, after rising 0.9% in June.

"The indexes for shelter, food, energy, and new vehicles all increased in July and contributed to the monthly all items seasonally adjusted increase," the Labor Department said in a statement.

The food index rose 0.7% in July, while the energy index increased 1.6%, and the gasoline index soared 2.4%, it added.

Core consumer prices, which exclude food and energy, rose 0.3% in July from the previous month, while they were up 4.3% year-on-year. The market estimates were 0.4% and 4.3%, respectively.

While core CPI increased 0.9% in June on a monthly basis, it was up 4.5% annually to mark the largest 12-month increase since 1991.

The CPI data is being closely watched by the Federal Reserve for inflation for an indication of when and how much it would raise interest rates.

The central bank indicated on June 16 that it could make two rate hikes by 0.25% each in 2023 to tame the rising inflation.

Fed Chair Jerome Powell has repeatedly said in recent months the bank would allow inflation to climb above its target of 2% for some time until full economic recovery is achieved.