The Bureau of Labor Statistics dropped its July Consumer Price Index report on August 12, and the numbers tell a story of inflation that’s stubborn but slowly losing steam. Headline CPI rose 0.1% month-over-month, a modest rebound after June’s eyebrow-raising 0.4% decline. On a year-over-year basis, prices climbed 3.4%, ticking down from 3.5% the prior month.
What the numbers actually show
Core CPI, which strips out the volatile food and energy categories to give a cleaner read on underlying price pressures, increased 0.2% month-over-month. That follows a flat reading in June. Year-over-year, core inflation came in at 2.5%, down slightly from 2.6%.
The biggest driver of the monthly increase was, once again, shelter costs. The shelter index rose 0.1% on the month, and that single category accounted for roughly two-thirds of the total monthly gain. Year-over-year, shelter is up 3.2%.
Energy, on the other hand, was the hero nobody asked for. The energy index fell 1.5% month-over-month, with gasoline prices dropping 2.9%. But the year-over-year energy picture is dramatically different: energy prices are still up 14.7% compared to July of last year.
