Consumer prices rose in July and the underlying trend continued to strengthen, pointing to a steady increase in inflation pressures that keeps the Federal Reserve on track to gradually raise interest rates.
The Labor Department said on Friday that its consumer price index (CPI) advanced 0.2 percent, the bulk of which was due to a rise in the cost of shelter, driven by higher rents. The CPI rose 0.1 percent in June.
In the 12 months through July, the CPI increased 2.9 percent, matching the yearly pace from June.
Excluding the volatile food and energy components, the CPI rose 0.2 percent, the same gain as in May and June. The annual increase in the so-called core CPI was 2.4 percent, the largest rise since September 2008, from 2.3 percent in June.
Economists polled by Reuters had forecast both the CPI and core CPI rising 0.2 percent in July.
U.S. Treasury yields held near three-week lows and U.S. stocks fell on anxiety about Turkey’s financial woes and its deepening rift with the United States. The U.S. dollar was trading higher against a basket of currencies.
“As the July CPI figures make clear, underlying price pressures are still mounting,” said Michael Pearce, senior U.S. economist at Capital Economics in New York.
The Fed more closely tracks a different inflation measure, the personal consumption expenditures (PCE) price index that excludes food and energy, which increased 1.9 percent in June.
That gauge hit the U.S. central bank’s 2 percent target in March for the first time in more than six years, and Fed policymakers have said they will not be unduly concerned if it overshoots its target in the coming months.
The U.S. central bank has raised rates twice this year, in March and June, and financial markets overwhelmingly expect a hike at the next policy meeting in September.
Last month, gasoline prices fell 0.6 percent after increasing 0.5 percent in June. Food prices edged up 0.1 percent after rising 0.2 percent in June.
Owners’ equivalent rent of primary residence, which is what a homeowner would pay to rent or receive from renting a home, advanced 0.3 percent last month after increasing by the same margin in June. Overall, the so-called shelter index rose 3.5 percent in the 12 months through July.
Health-care costs fell 0.2 percent after gaining 0.4 percent in June. Prices for new motor vehicles rose 0.3 percent in July following a 0.4 percent increase in the prior month. Apparel prices were down 0.3 percent after a 0.9 percent drop in June.
Four women who used to work for Nike have filed a federal lawsuit against the company, alleging that it violated state and U.S. equal-pay laws and fostered a work environment that allowed sexual harassment. The Oregonian/OregonLive reports that the suit filed Thursday in Portland is among the first to hit the company following complaints about alleged pay disparities and bad managers made public earlier this year. Nike responded by ousting at least 11 executives in March and April. Attorney Laura Salerno Owens says Nike continues to have a "good-old-boy's culture" in which women enter the company with lower pay, and receive smaller raises and bonuses. The plaintiffs seek unspecified monetary damages and a court order requiring Nike to pay its employees fairly without regard to gender. Nike officials declined to comment on the lawsuit.
Emirates airline expects a single-digit percentage increase in its U.S. capacity in 2018, a company executive said on Friday, as sales rebound after travel restrictions imposed by the Trump administration weakened demand from the Middle East early last year. Matt Schmid, senior vice president of Emirates North America, said by phone from Toronto that travel demand to and from the United States is back at levels from before January 2017. Emirates has already increased the number of flights on some U.S. routes it had reduced in spring 2017 after U.S. government travel restrictions weakened demand. The carrier is also adding capacity in Canada, expanding its A380 service to the country's largest city, Toronto, effective Aug. 18.
— From news services