Consumer prices fell slightly from a 40-year high in July, but inflation remains above an 8% rate for the fifth straight month, according to the National Association of Home Builders' Eye on Housing. The sudden decline may mean that both core Personal Consumption Expenditures (PCE) Price Index and Consumer Price Index (CPI) measures of inflation have now peaked as a result of the Fed’s tight monetary policy slowing the housing market and overall economy. After consistent gains, the CPI was unchanged in July on a seasonally adjusted basis.
The price index for gasoline fell 7.7% in July, while the natural gas index dropped 3.6%. The July index for shelter, which makes up more than 40% of the “core” CPI, increased by 0.5% after rising 0.6% in June and May, but more cost increases are expected to come from this category.
The Bureau of Labor Statistics (BLS) reported that the Consumer Price Index (CPI) was unchanged in July on a seasonally adjusted basis, following an increase of 1.3% in June. The price index for a broad set of energy sources fell by 4.6% in July, with a decline in gasoline (-7.7%) and the natural gas index (-3.6%). Excluding the volatile food and energy components, the “core” CPI increased by 0.3% in July, following an increase of 0.7% in June. Meanwhile, the food index increased by 1.1% in July as the index for food at home rose by 1.3%.