In the recent report of the Bureau of Labor Statistics, the US inflation for July 2011 inclined by 0.5% or in annual terms it rose by 3.6%. The CPI without food and energy also rose by 0.2% during July and 1.8% in the past twelve months.
The prime reason for the increase was related to the energy index that inclined by 2.8% (M-2-M) during July. In annual terms the energy index increased by 19%. Among the energy products, the gasoline led the hike with a 4.7% increase during July. This effect is primarily exogenous to the US economy as the oil and gasoline prices are mainly determined by global events such as the changes in OPEC supply, changes in stock markets and changes in US dollar.
The report also showed, a moderate incline in food index as it rose by 0.4% during July and in annual terms food index increased by 4.2%.
In the previous month the June 2011 CPI declined by 0.2% (M-2-M).
This shift in direction back to an increase in inflation is mostly imported from the changes in oil prices; the recent decline in crude oil prices at the beginning of the month is likely to bring down the US inflation rate in August.
Among components in the core CPI that contributed to the increase in US inflation are used cars and trucks (0.7% M-2-M) and apparel (1.2% M-2-M). This means that the US will reach an inflation rate of over 3-4 percent in 2011.
Stock market opened trading with sharp falls
The stock market is currently traded sharply down as the S&P500 index is currently traded down by 4.28%. This news drags the Euro to US dollar down along with crude oil prices, while gold and silver prices benefit from these falls and trade up.
Current Nymex crude oil price, short term futures (September 2011 delivery) is traded up by 2% to $83.66 per barrel as of 17:00*.
Current gold price, short term futures (September 2011 delivery) is traded at $1,823.7 per t oz. a $29.9 increase or 1.67%, as of 16:58*.
Euros to US Dollar exchange rate is currently traded down by 0.7847% to 1.4313 as of 17:07*.
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