The Consumer Price Index (CPI) bounced back in July, following a slight decline in June that ended an eleven-month run of increases. The Bureau of Labor Statistics (BLS) reported a 0.5% (SA) increase in the CPI for All Urban Consumers in July, following a 0.2% decline in June. Over the last 12 months, the all-items index has increased 3.6% (NSA).

All major components of the index contributed to the rise, with a 2.8% increase in the energy index, 0.4% increase in the food index and 0.2% increase in the core index.

Gasoline prices have been the main factor driving the CPI for much of the past year, and July was no exception, with a 4.7% increase that accounted for about half of the overall increase in the all-items index.

The rate of increase in food prices accelerated in July with a notable increase in dairy and fresh fruit prices.

Momentum is also building in the shelter index, increasing at a rate of 0.3% in July, following 0.2% in May and June and 0.1% for the previous 7 months. Overall, the shelter index is up 1.4% (NSA) relative to July 2010. July’s rise represents the largest increase for the shelter index since June 2008 and points to firming conditions in the market for rental housing.

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