US consumer prices increased moderately in July, though rising costs for services such as airline fares and some tariff-sensitive goods like household furniture caused a measure of underlying inflation to post its largest gain in six months.
The mixed report from the Labour Department’s Bureau of Labour Statistics yesterday did not change financial market expectations that the Federal Reserve would cut interest rates in September amid signs of a deterioration in labour market conditions.
Economists, however, cautioned that higher prices from President Donald Trump’s sweeping tariffs were still coming. They argued that businesses continued to sell merchandise accumulated before the import duties came into effect.
The CPI rose 0.2 per cent last month after a gain of 0.3pc in June. The moderation reflected a 2.2pc decline in petrol prices.
Food prices were unchanged after rising 0.3pc for two straight months.
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