Consumer Prices Accelerate Slightly

Consumer prices slightly accelerated their creep higher in July, rising 0.2 percent for the overall index as well as for the core (ex-food ex-energy). Year-on-year, prices were up 2.9 percent for the overall, unchanged from June as expected, but up 1 tenth to 2.4 percent, exceeding the range of expectations and the strongest gain since September 2008.

Transportation continued to show pressure with a 0.3 percent monthly gain putting the yearly rate at 7.3 percent. Vehicle prices rose sharply again in July, up 0.3 percent for new cars and light trucks with used cars up 1.3 percent.

But medical care prices fell back by 0.2 percent after rising 0.4 percent in the previous month and put the year-on-year rate at a subdued 1.9 percent.

Housing prices were up 0.2 percent July after a flat reading in July.