The Bureau of Labor Statistics published its recent report of the U.S CPI for July 2013. Based on the latest update, the consumer price index rose again for the third consecutive month; in annual terms the US CPI increased by 2%. The consumer price index sans food and energy edged up by 0.2% during July and by 1.7% in the past twelve months.
The prime reason for the rise in the U.S. consumer price index was related to the increase in energy prices: the energy index rose by 0.1% (M-2-M) during the month; in annual terms the energy index increased by 1.4%; among the energy products, the fuel oil led the gain with a 1.1% rise during last month. Moreover, the food index slightly rose by 0.1% during the month. During the past twelve months, the food index rose by 1.4%.
The core U.S inflation (CPI sans energy and food) inched up by 0.2% during July and by 1.7% during the past 12 months. These figures coincided with the recent U.S PPI report, in which the core PPI inched up by 0.1% during last month.
In the previous monthly report for June 2013 CPI also rose by 0.5% and the core CPI inched up by 0.2% (M-2-M).
Despite the moderate rise in the CPI, it is still very low and remains lower than the inflation target of the Federal Reserve. The low inflation could suggest the U.S economy isn’t heating up, which could raise the odds of the Fed leaving its policy unchanged and keeping the current asset purchase program unchanged. This news may have contributed to the rally of gold and silver prices and the drop in the US dollar against leading currencies including Euro.
Philly Fed survey for August
In other news, the Philly Fed survey came out for the month of August: The report showed a sharp drop in the Philly Fed index from 19.8 to 9.3, which still means the manufacturing conditions are growing but at a slower pace. This news is also not a positive sign for the progress of the US economy, which could pressure down the US dollar.
Jobless claims fell by 15k to reach 320k during the week ending on August 10th.
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