Yesterday, the U.S. Bureau of Labor Statistics announced that the Consumer Price Index (CPI) rose by 0.2 percent in July, following a decrease of 0.1 percent in June. In the past year, the overall index for all items has gone up by 2.9 percent.
The core consumer price index, which omits food and energy prices and is a key indicator for economists, increased by 0.2 percent in July, following a 0.1 percent rise in the previous month. Over the past year, this index has climbed by 3.2 percent, marking the lowest annual increase since April 2021, according to the Bureau of Labor Statistics (BLS). “The CPI data released this morning suggests a positive impact on U.S. auto insurers, as the sector is now experiencing a recovery. An extended period of improved profits in the auto industry will benefit several companies, although over time, this better performance may lead to increased competition and pushback from policyholders and regulators against further price hikes.” — Jim Auden, U.S. P&C Insurance, Fitch Ratings
For July:
The shelter index increased by 0.4 percent, contributing to almost 90 percent of the overall rise in the total items index.
Along with housing, the categories that saw a rise in July included auto insurance, home furnishings and maintenance, education, leisure activities, and personal grooming. Conversely, the prices for used vehicles, healthcare, flight tickets, and clothing experienced a decline during the month.
Experts anticipate that the findings from the July report will persuade the Federal Reserve to lower interest rates in the upcoming month.
Additional information from the BLS report released today:
In July, the overall index for all items excluding food and energy increased by 0.2 percent, building on a 0.1 percent rise from the previous month. The energy index remained stable for the month, having experienced declines in the two months prior, while the gasoline index also showed no change.
The medical care index saw a decrease of 0.2 percent in July, reversing a 0.2 percent increase from June. Specifically, the index for hospital services dropped by 1.1 percent in July, while both the indices for physicians’ services and prescription drugs rose by 0.1 percent.
The food index experienced a 0.2 percent increase in July, mirroring the rise seen in June. Within this category, the index for food purchased at home grew by 0.1 percent. Among the six major food group indices tracked at grocery stores, three registered increases while the other three saw declines in July. Notably, the index for meats, poultry, fish, and eggs increased by 0.7 percent, with the eggs index surging by 5.5 percent. Additionally, the index for fruits and vegetables climbed by 0.8 percent, and the nonalcoholic beverages index rose by 0.5 percent.
Motor vehicle insurance saw a 1.2 percent rise in July, following a 0.9 percent gain in June. Conversely, the index for used cars and trucks fell by 2.3 percent in July, after a 1.5 percent decrease in June.
For one year:
The overall index for all items saw a 2.9 percent rise for the year ending in July, marking the lowest annual increase since March 2021. The index for all items excluding food and energy grew by 3.2 percent in the past year, which is the smallest annual rise for that index since April 2021. The energy index experienced a 1.1 percent increase over the year ending in July, while the gasoline index dropped by 2.2 percent during the same period. The food index rose by 2.2 percent over the past year. Significant increases in other categories over the last year included motor vehicle insurance (up 18.6 percent), medical care (up 3.2 percent), personal care (up 3.4 percent), and recreation (up 1.4 percent).
Source: Bureau of Labor Statistics
