US inflation jumps in July pushed by higher housing, energy
WASHINGTON, Aug 13: Rising energy, housing and medical costs pushed US consumer inflation higher in July, which showed the trade war having some impact, according to government data released Friday.
The increase was another sign the world's biggest economy may finally be starting to see inflation in the 11th year of expansion despite slowing growth -- something the Federal Reserve has been waiting to see.
And while President Donald Trump insists punitive tariffs are not hurting American consumers, economists warn the trade impact is showing up in the data.
The Consumer Price Index jumped 0.3 per cent compared to June, the Labor Department reported, and accelerated to show a 1.8 per cent increase for the 12 months ended in July.
Energy costs surged 1.3 per cent last month and shelter costs posted another 0.3 per cent increase as rents remain under pressure amid tight supply of housing.
"The past four months have seen the three biggest monthly increases in primary rents in the past 12 years; this is not just noise," said Ian Shepherdson of Pantheon Macroeconomics said of the rising housing costs.
Food prices were flat, but medical care services rose 0.5 per cent, including a 1.7 per cent jump in health insurance, according to the report. That category has increased 3.3 per cent since a year ago, while insurance surged just under 16 per cent, the largest increase ever recorded.
Excluding the volatile food and energy components, the closely-watched core CPI measure again rose 0.3 per cent in July compared to the prior month, bigger than economists had forecast, making it 2.2 per cent higher than July 2018.
Used car prices rose 0.9 per cent after spiking in June, and are up 1.5 per cent for the year, according to the data. -AFP