Inflation in the US has ticked up to a 3.2 percent annual rate – rising slightly in July from June’s 3 percent annual increase.
It is the first time in 13 months that the pace of consumer price hikes has accelerated on a yearly basis.
However the latest Consumer Price Index released Thursday by the Bureau of Labor Statistics showed that monthly price increases remained modest.
Inflation grew by 0.2 percent in July – the same rate as in June – which could possibly deter the Federal Reserve from raising interest rates again in September.
This monthly increase was in line with projections, while the annual rate was slightly below the 3.3 percent forecast.
The 3.2 percent annual inflation rate is a sharp decrease from the 9.1 percent peak seen last June, but is still considerably above the Federal Reserve’s target rate of 2 percent.
After pausing interest rate rises for the first time in 15 months in June, the central bank made the unanimous decision to raise rates again in July – taking benchmark borrowing costs to the highest level in more than two decades.
In a much-anticipated move, the Fed increased rates to between 5.25 and 5.5 percent – a range not seen since early 2001 – as part of its aggressive drive to dampen inflation.
July’s uptick in inflation was driven mainly by shelter costs, which include rent, accounting for 90 percent of the monthly increase, according to the Bureau of Labor Statistics.
The food index also rose 0.2 percent in July after increasing 0.1 percent the previous month. Over the last year, it also went up by 4.9 percent – as the price of groceries continues to weigh on households.
This is a breaking news story. More to follow.