BUSINESS-ECONOMY
A 0.4 per cent rise in shelter costs accounted for 90 per cent of the overall inflation increase, while food prices edged up 0.2 per cent, and energy costs remained flat. Notably, food inflation saw varied impacts, with egg prices surging by 5.5 per cent, while cereals and bakery items declined by 0.5 per cent. In July, the US annual inflation rate slowed to 2.9 per cent, its lowest level since March 2021, according to the latest report from the US Labor Department. The Consumer Price Index (CPI), a broad gauge of prices for goods and services, rose by 0.2 per cent for the month, aligning with economists' expectations. Core CPI, which excludes volatile food and energy prices, also increased by 0.2 per cent on a monthly basis and 3.2 per cent annually, matching predictions. A 0.4 per cent rise in shelter costs accounted for 90 per cent of the overall inflation increase, while food prices edged up 0.2 per cent, and energy costs remained flat. Notably, food inflation saw varied impacts, with egg prices surging by 5.5 per cent, while cereals and bakery items declined by 0.5 per cent. Despite these fluctuations, inflation is gradually aligning with the Federal Reserve's 2 per cent target. The producer price index, a measure of wholesale inflation, rose by just 0.1 per cent in July, marking a 2.2 per cent year-over-year increase. Financial markets reacted mildly to the report, with stock futures slightly negative and Treasury yields mostly higher. Fed officials are now likely considering an interest rate cut in September, with futures markets indicating a growing likelihood of a quarter-point reduction at the next Fed meeting. However, the report highlights persistent inflationary pressures in specific sectors. Automotive prices continued to fall, but auto insurance costs surged by 1.2 per cent, up 18.6 per cent over the past year. Shelter costs, which make up over a third of the CPI, rose by 5.3 per cent annually, defying expectations of easing in housing-related expenses. As inflation eases, the focus shifts to the Federal Reserve's next move, with potential interest rate cuts on the horizon. A journalist, writing for the WION Business desk. Bringing you insightful business news with a touch of creativity and simplicity. Find me on Instagram as Zihvee, tr None
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