US consumer costs less than expected for July
The cost of living in the US rose in July at the slowest pace in three months, casting doubt on how quickly inflation will return toward the Federal Reserve's goal.
The consumer price index climbed 0.1pc after a 0.3pc gain the month before, a Labor Department report showed yesterday in Washington.
The median forecast of 78 economists surveyed projected a 0.2pc increase. Excluding food and fuel, costs also rose less than projected.
Oil has plunged more than 30pc from this year's closing peak in June amid a global supply glut that will probably hold down inflation in the coming months. When combined with a stronger dollar and slower growth overseas, the energy slump will make the Fed's price goal even more elusive.
Airfares plunged 5.6pc in July, the most since December 1995, showing how falling fuel costs can ripple through the economy.
Expenses for shelter climbed 0.4pc, the most since February 2007, driven mainly last month by hotel rates. Consumer costs across the US over the past 12 months increased 0.2pc.
Policy makers have twin goals of maximum sustainable employment and inflation of around 2pc, progress toward which will dictate when, and how often, they'll raise interest rates. (Bloomberg)