CPI Snooze

deflation hot air balloon

And the result is… unchanged.

Core inflation up 0.1% in July, in line with expectations.  This is a decrease from 0.2% in June.

BLS: On a seasonally adjusted basis, the CPI-U was unchanged in July following a 0.7 per cent increase in June. Small declines in the food and energy indexes offset a small increase in the index for all items less food and energy. The food index declined 0.3 per cent in July with all six major grocery store food groups posting declines. The energy index, which rose 7.4 per cent in June, fell 0.4 per cent in July. Decreases in the indexes for gasoline, fuel oil, and electricity more than offset an increase in the index for natural gas.

Of course, the cost of medical care keeps chugging higher…

Among other CPI groups, the medical care index rose 0.2 per cent in July, the same increase as in June. Within that group, the index for hospital and related services rose 0.7 per cent while the index for prescription drugs was unchanged. Over the last 12 months, the medical care index has risen 3.2 per cent.

It’s worth noting that the headline CPI dropped 2.1% year over year.  We are still in our first spate of deflation since the 1950s.  (The chart below, from Northern Trust, shows the CPI through June).

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