Annual Inflation Rate in July Marks First Increase in 13 Months

Craig Bannister | August 10, 2023
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Inflation held steady in July, as the seasonally adjusted Consumer Price Index (CPI) for all urban consumers rose 0.2% from June - but the increase from a year earlier raised concerns - according to data released Thursday by the U.S. Bureau of Labor Statistics (BLS).

The all items index increased 3.2% for the 12 months ending July, slightly more than the 3.0% increase for the 12 months ending in June.

July’s 3.2% rise marks the first time in 13 months that that a month’s rate of increase from the same month a year earlier has risen.

The “core” index, all items less food and energy, rose 4.7% over the last 12 months.

The energy index decreased 12.5% for the 12 months ending in July. Over the past week (Aug. 3-10, 2023), however, the price of a major driver of the energy index – gas – is up 29 cents a gallon (regular). The cost of gasoline (all types) increased 0.2% on a seasonally-adjusted basis from June, while the fuel oil index rose 0.3%, month-to-month. Compared to June, the overall energy index rose 0.1% in July as the major energy component indexes were mixed.

The index for shelter (up 0.4%) was, by far, the largest contributor to the monthly increase for all items - accounting for more than 90 percent of the rise. Compared to July of 2022, the cost of shelter was 7.7% higher.

The food index increased 0.2% in July after rising 0.1% the previous month. The index for food at home increased 0.3% and food away from home rose 0.2% in July, compared to June. The food index increased 4.9% over the last year, as the cost of food at home rose 3.6% and food away from home jumped 7.1%.

The meats, poultry, fish, and eggs index declined 0.2% over the year. The remaining major grocery store food groups posted increases ranging from 1.3 percent (dairy and related products) to 5.4% (both nonalcoholic beverages and other food at home).

Excluding food and energy, the core price index rose 0.2% month-to-month, as it did in June. But, the cost of shelter was up 0.4% from June and 7.7% over the previous 12 months. Likewise, the price of transportation services rose 0.3% from June and 9.0%, compared to year-ago.

The business and economic reporting of is funded in part with a gift made in memory of Dr. Keith C. Wold.

BLS Year to Year CPI Chart
Source: U.S. Bureau of Labor Statistics (BLS)