Gregory Heym is Chief Economist at Brown Harris Stevens. His weekly series, The Line, covers new developments to the economy, including trends and forecasts. Read on for the latest report and subscribe here to receive The Line in your inbox.
While I’m on vacation, I wanted to take a minute and give you the latest on inflation.
Inflation Lower Than Expected in July
Here are the highlights of the July CPI report:
- The consumer price index rose 0.2% last month and was 3.2% higher than a year ago.
- While the 12-month change was higher than June’s 3.0% rate, it was expected due to "technical factors." Since I love to point out when I’m right, here’s a link to my column on June’s CPI report, where I said to expect this.
- Shelter costs accounted for over 90% of the monthly increase in CPI.
- Core inflation—which excludes food and energy prices—rose 4.7% over the past year, the lowest annual increase since October 2021.
- This is the most important bit of data in the report, as core inflation will take longer to come down than the headline number. The fact that it’s at the lowest level in almost two years is a good indication that inflation continues to move in the right direction.
- Expect the Fed to still hike rates next month, as inflation remains well above its 2% target rate.
You can read the full CPI report at this link.
