The core consumer price index, which excludes often-volatile food and energy costs, rose 0.2 per cent for a second month, Bureau of Labor Statistics data showed Thursday. That marked the smallest back-to-back gains in more than two years.
The core gauge was up 4.7 per cent from July 2022. While still elevated, underlying inflation has slowed nearly every month since peaking at 6.6 per cent in September. The latest CPI report is just one of a number of key data releases Fed officials will have in hand ahead of their September meeting. Should current trends continue, it’s likely the Fed will leave rates unchanged next month.The details showed more than 90 per cent of the increase on the overall CPI was due to housing costs that have otherwise moderated since the start of the year. Car insurance also contributed to the gain.
While Fed Chair Jerome Powell and his colleagues have stressed the importance of looking at such a metric when assessing the nation’s inflation trajectory, they compute it based on a separate index. The July personal consumption expenditures price index, which is also the basis of the Fed’s 2 per cent target, will be released later this month.