Led by rising energy prices, the Consumer Price Index (CPI), a key measure of U.S. inflation, rose half a percentage point on a seasonally adjusted basis in July, the U.S. Labor Department reported on August 16. Last month's increase was a sharp contrast to the CPI's performance in June, when it was unchanged from May.
Energy costs increased sharply in July, with prices overall rising 3.8% in July after declining half a percentage point in June. Prices for petroleum-based energy advanced at an even faster rate of 6.1% in July and accounted for more than half of the increase in the overall CPI, the Labor Department said.
Reassuring, however, was July's performance of the so-called core CPI, an inflation measure that subtracts the often-volatile month-to-month prices changes in food and fuel from the overall CPI. It rose just one-tenth of a percentage point in July, for the third consecutive month. The core CPI's biggest month-to-month gain was back in March, when it rose four-tenths of a percentage point.
Separately, the Labor Department reported that average weekly earnings, adjusted for inflation, decreased by two-tenths of a percent in July in the private, non-farm sector of the U.S. economy. A four-tenths percent increase in average hourly earnings was more than offset by a six-tenths percent increase in the CPI for urban wage earners and clerical workers. The average number of weekly hours was unchanged from June to July. In manufacturing, average weekly earnings were $656.30 in July compared with $669.06 in June.
