The Consumer Price Index (CPI) reported that the all items index increased 2.9 percent over the last twelve months. The Federal Reserve’s targeted annual inflation rate is two percent. This is the first time the annual inflation rate has dipped below three percent since 2021.
Due to the decrease in annual inflation, varying media outlets are expecting that the likelihood of the Federal Reserve cutting interest rates in September is higher than previously thought. [Reuters, AP]
According to the CPI report, the all items index rose 2.9 percent for the 12 months ending July, the smallest 12-month increase since March 2021. The all items less food and energy index rose 3.2 percent over the last 12 months and was the smallest 12-month increase in that index since April 2021. The energy index increased 1.1 percent for the 12 months ending July. The food index increased 2.2 percent over the last year.
The food index increased 0.2 percent in July, as it did in June. The index for food at home rose by 0.1
percent in July. Three of the six major grocery store food group indexes increased over the month while the other three indexes declined in July. The index for meats, poultry, fish, and eggs rose 0.7 percent in July as the index for eggs increased 5.5 percent. The index for food at home rose 1.1 percent over the last 12 months. The meats, poultry, fish, and eggs index rose 3.0 percent over the same period. The index for other food at home rose 0.9 percent.
For chicken specifically, the index rose 1.7 percent in the last twelve months and 0.1 percent in July.
The energy index was unchanged in July, after decreasing 2.0 percent in June. However, the energy index increased 1.1 percent over the past 12 months. The index for electricity increased 4.9 percent over the last 12 months, and the index for natural gas rose 1.5 percent. The gasoline index fell 2.2
percent over this 12-month span. The index for fuel oil fell 0.3 percent over the same period.
The full CPI report for this month from which this information was derived can be found here.
