CPI rises 5.4% from a year ago with many companies either increasing prices or planning to hike
Shoppers are shown in New York, the US in this file photo. Picture: REUTERS/JEENAH MOON
Price measures of food, energy, shelter and new vehicles all contributed to the July gain. Airfares and auto insurance costs declined. “July was a bit of a transition month, as the reopening surge in prices started to abate while other categories show signs of taking the baton,” Stephen Stanley, chief economist at Amherst Pierpont Securities, said in a note.
The path of inflation in the coming months has policy implications both for the Fed, in terms of its timeline for reducing monetary support, as well as President Joe Biden. Many companies have increased, or plan to increase, consumer prices to offset higher material and production costs, including Colgate-Palmolive, Procter & Gamble, and Kimberly-Clark.
Shelter costs, which are seen as a more structural component of the CPI and make up about a third of the overall index, increased 0.4% and accounted for more than half the monthly gain in the core index.The rent index rose 0.2%, as owners’ equivalent rent — a gauge of price appreciation for purchased homes — climbed 0.3%. While rents and home values have jumped recently, it takes time for the price shifts to feed into the official inflation measures.
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