WASHINGTON – The US consumer price index (CPI) rose 0.2 percent in July from the previous month and 2.9 percent relative to July 2017, the Labor Department said on Friday.
Excluding the volatile price categories of food and energy, underlying, or core, CPI rose 0.2 percent last month and 2.4 percent for the 12 months ending in July, the biggest increase since September 2008.
The figures released by the Bureau of Labor Statistics were in line with economists’ forecasts.
The main drivers of the price increases in July were housing, up 0.3 percent; food, which rose 0.1 percent; and motor vehicles, up 0.3 percent.
Gasoline prices, meanwhile, decreased by 0.6 percent.
The government report attributed 60 percent of the CPI increase in July to higher housing costs.
Given the steady rise in US consumer prices, the Federal Reserve is expected to continue its program of gradual interest rate hikes for the remainder of 2018.
The US central bank raised its benchmark federal-funds rate in March and then did so again in June, leaving it at a range of between 1.75 percent and 2 percent.
At least two more rate hikes are expected before year’s end due to the current robust economy and 3.9 percent unemployment rate in July.
Economists expect the Fed will approve another rise in the federal-funds rate when its monetary policy-making body meets on Sept. 25-26.