US inflation slows in July on falling fuel prices

US consumer inflation slowed in July from the prior month's four-decade high, led by monthly declines in fuel costs, while core inflation edged lower on the month.

The consumer price index (CPI) rose at an 8.5pc annual rate last month, easing from 9.1pc in June, the Bureau of Labor Statistics (BLS) reported. The energy index increased by 32.9pc for the 12 months, easing from the 41.6pc increase in the 12 months through June. The food index rose by 10.9pc over the last year, the largest such increase since the 12 months ended May 1979.

Falling fuel prices are helping to ease inflationary pressures as demand slows, along with the overall economy, even as the labor market remains resilient. Aggressive interest rate hikes from the Federal Reserve are beginning to slow home construction and purchases of houses, cars, and other big-ticket items, while also sending jitters through financial markets in recent months.

Gasoline rose by 44pc through July, falling from 59.9pc in the prior 12-month period. Fuel oil rose by 75.6pc, easing from 98.5pc. Piped gas rose by 30.5pc in the 12 months through July, down from 38.4pc. Shelter costs less energy rose by 5.5pc.

Core inflation, which strips out food and energy, rose by 5.9pc in the 12 months through July, matching the annual gain through June, even while ticking lower on the month.

The index for new vehicle prices rose by 10.4pc after an 11.4pc gain through the prior month. Used car costs rose by 7.1pc, easing from 11.4pc in the prior 12-month period.

Compared with the prior month, the CPI was unchanged in July on a seasonally adjusted basis after rising 1.3pc in June. The energy index fell by 4.6pc over the month after a 7.5pc gain the prior month. Core inflation rose by 0.3pc in July after a 0.7pc gain the prior month.

The gasoline index fell by 7.7pc on the month after a 7.5pc gain the prior month.

The energy index fell by 4.6pc after a 7.5pc gain the prior month. Fuel oil fell by 11pc after a 1.2pc decline the prior month, which followed a 16.9pc gain in May.

By Robert Willis