- Prices for goods and services rose in July, marking the fastest inflation rise since 2008
- Core CPI rose slightly less than expected
Consumer prices in the United States increased 5.4% in July, continuing a trend of acceleration in recent months, the Labor Department reported Wednesday. It marks the fastest inflation rise since 2008.
The consumer price index rose 0.5%, in line with expectations. The core CPI, which excludes food and energy, rose 0.3%, just under the expected 0.4%. Core CPI is sometimes seen as the more accurate inflation indicator as it excludes volatile food and fuel prices.
CPI data reveals how much more or less Americans are paying for goods and services from the month prior.
Used car prices, a metric that often reveals broader inflationary trends, rose just 0.2% in July after a 10.5% increase in June. Prices for used cars and trucks rose nearly 30% between May 2020 and May 2021.
Surging prices in the second-hand vehicle market have helped US inflation soar to the highest levels in more than a decade. Analysts that view inflation as transitory predicted the market would level off this year.
“Used car inflation should be less of an issue in the second half of 2021, lowering the chance of big upside surprises in upcoming CPI reports,” said Nicolas Colas, co-founder of DataTrek Research, in June.
Investors are watching the Federal Reserve for signs that bond purchase tapering may start soon. Chairman Jerome Powell has insisted in recent months that inflation is transitory and higher prices are associated with reopening efforts and supply chain issues.