U.S. Consumer Prices Rose 0.2% in July
10 August 2018 - 2:03PM
Dow Jones News
By Josh Mitchell and Sarah Chaney
WASHINGTON -- Inflation picked up modestly in July, eating up
Americans' wage gains.
The consumer-price index -- a broad measure of Americans' living
expenses, from groceries to dental care -- rose 0.2% from a month
earlier, the Labor Department said Friday. Excluding food and
energy components, so-called core prices rose 0.2% as well.
The increases fell in line with economists' expectations.
Overall prices have climbed 2.9% over the past year, near the
biggest gains of the expansion. Core prices increased 2.4%, the
biggest 12-month gain since September 2008.
The report suggests inflation is steadily, but not rapidly,
increasing as the economy heats up. The latest gain is likely to
reassure the Federal Reserve as it considers raising interest rates
-- it has penciled in two more increases for this year -- to keep
the economy on an even keel.
But the higher prices also mean Americans' are losing purchasing
power. A separate report released Friday showed average hourly
earnings were flat in July, and average weekly earnings fell
0.2%.
Over the past year, average hourly earnings have fallen 0.2%
while weekly earnings have climbed 0.1%.
The weak growth in earnings, relative to inflation, could
constrain Americans' ability to spend and thus weigh on the broader
economy.
Higher housing costs drove last month's gain in overall prices.
A rise in so-called shelter costs -- reflecting rent and mortgage
costs -- accounted for 60% of last month's gain in the overall
index.
Broadly, most consumer prices are rising over the past year.
Energy prices have climbed 12.1% over the past 12 months, driven by
higher gasoline costs.
The inflation outlook is cloudy. Tariffs imposed by the Trump
administration could push up inflation. But a rise in the dollar
could weigh on it.
Write to Josh Mitchell at joshua.mitchell@wsj.com and Sarah
Chaney at sarah.chaney@wsj.com
(END) Dow Jones Newswires
August 10, 2018 08:48 ET (12:48 GMT)
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