Unmasking July’s Inflation Report

Piece written by Alex Weiss, Trive Financial Market Analyst

In the scorching embrace of July, the Consumer Price Index for All Urban Consumers (CPI-U) unveiled its latest chapter, painting a vivid picture of economic uncertainty as the FED aims to bring inflation down toward its much-anticipated target rate. The stage was set with a 0.2 percent monthly rise in the CPI-U, mirroring June’s ascent. Over the past year, however, a grander narrative unfolded, showcasing a 3.2 percent surge before seasonal adjustment.

The spotlight, however, shone brightest on the shelter index, emerging as the dominant force behind the monthly surge, accounting for over 90 percent of the increase. The food index took place on stage, increasing by 0.2 percent in July, building upon its 0.1 percent climb from the previous month. The index for all items excluding food and energy danced to the same beat as June.

As the economic drama unfolded, the past 12 months took centre stage, revealing a 3.2 percent rise in the all-items index and a 4.7 percent surge in the all-items less food and energy index. The energy index, however, took a different trajectory, plummeting by 12.5 percent, while the food index painted a contrasting picture with a 4.9 percent rise over the same period.

Amid this intricate narrative, subplots revealed a more profound story—families gearing up to send their children to educational institutions feeling the pinch as ‘Housing at school’ soared by 0.9 percent from June, the most significant jump since 2004. 

Sources: Bloomberg

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