WASHINGTON – Consumer prices outpaced expectations for the third month in a row, reaching their highest level in nearly a year an a half, as fuel and food prices continued to soar, the U.S. Department of Labor’s Bureau of Labor Statistics reported today.
The nationwide Consumer Price Index for All Urban Consumers (CPI-U) rose a seasonally adjusted 0.8 percent compared with the month before, after rising 1.1 percent in June, the BLS said.
Analysts had expected the CPI-U to rise 0.4 percent in July, based on the median forecast from a Bloomberg News survey of 78 economists. (Their estimates called for gains of 0.1 percent to 0.7 percent.)
Core prices excluding food and energy rose 0.3 percent compared with the month before, matching their June gain and exceeding the survey’s 0.2-percent prediction. Food prices rose 0.9 percent, after rising 0.8 percent the month before. Energy prices rose 4 percent in July, slowing from the preceding month’s 6.6-percent gain.
Compared with a year ago, the CPI-U rose 5.6 percent to a July level of 126.116 points (December 1999=100), the BLS said.
The core price index rose 2.5 percent, accelerating from June’s year-over-year gain of 2.4 percent. Food prices rose 6.0 percent compared with a year ago, while energy prices rose 29.3 percent.
“A tremendous amount of cost pressure here … is affecting many, many industries,” William Poole, former president of the St. Louis Federal Reserve Bank, told Bloomberg Television. The new report “raises the general trajectory,” making further Fed rate cuts less likely, he added.
Meanwhile, the BLS said in a separate report, real average weekly earnings fell a seasonally adjusted 0.8 percent compared with June, and 3.1 percent compared with a year ago, to a July level of $606.26. “A 0.3-percent increase in average hourly earnings was more than offset by a 0.3-percent decrease in average weekly hours and a 0.9-percent increase” in consumer prices, the bureau said.
Additional information, including the 19-page Consumer Price Index report, is available from the U.S. Department of Labor’s Bureau of Labor Statistics at www.bls.gov/cpi; the five-page Real Earnings report can be found at www.bls.gov/ces.
