The Bureau of Labor Statistics (BLS) reported that consumer prices increased slightly in July by 0.1% on a seasonally adjusted month-over-month basis. This represents the smallest month-over-month increase since February. Over the past twelve months, prices on expenditures made by urban consumers increased 2.0% before seasonal adjustments.
The energy price index decreased 0.3% month-over-month in July following a large 1.6% increase in June. All components of the energy index decreased from the prior month including the gasoline index which fell 0.3%. Over the past twelve months, the energy index increased 2.6% before seasonal adjustments.
The increase in food prices picked up after a brief pause last month. The month-over-month increase in the food price index was 0.4% in July. Over the past twelve months the food index increased 2.5% before seasonal adjustments.
The Core CPI, which excludes more volatile food and energy prices, also rose 0.1% month-over-month. Over the past twelve months Core CPI increased 1.9%.
The shelter index rose 0.3% month-over-month in July after increasing 0.2% month-over-month in June. Over the past twelve months, the shelter index increased 2.9% before seasonal adjustments.
The increase in the shelter index partly reflects increases in rental prices; the BLS measure does not isolate the change in rental prices from the changes in the overall price index. NAHB constructs a real price index by deflating the price index for rent by the index for overall inflation. This measure indicates whether inflation in rents is faster or slower than general inflation and provides insight into the supply and demand conditions for rental housing, after controlling for overall inflation. When rents are rising faster (slower) than general inflation the real rent index rises (declines).
The real rent index increased in July 0.2% month-over-month and 1.4% over the past year.