United States consumer prices accelerate in July; inflation remains under control By

Marco Green
August 13, 2020

USA producer prices increased by the most in more than 1-1/2 years in July, but the overall trend in producer inflation remained subdued amid signs the economy's recovery from the COVID-19 recession was faltering.

A rise in Serbia's consumer price index (CPI) by 0.2% month-on-month in July was mostly supported by higher prices of oil products, cigarettes and tour packages, the central bank said on Wednesday. A 0.4% increase in the prices for services, excluding trade, transportation, and warehousing, accounted for about 60% of last month's rise. Staples like beef saw a jump in prices as demand at the supermarket rose while supply stayed steady.

On the year, inflation rose 1% in July from 0.6% the month before and versus expectations of 0.8% growth.

Inflation within those core elements, however, remained muted at 1.6% compared to July 2019.

At 1.6%, the spread between food away from home inflation and at home inflation is at its highest level since the early 1970s and hasn't been close to these levels since 1991.

USA consumer prices rose more than expected in July, with a measure of underlying inflation increasing by the most in 29-1/2 years amid broad gains in the costs of goods and services. The Federal Reserve recently raised its inflation target from an annual 2%, pledging to keep interest rates low.

Economists have warned that the US economy is at serious risk of sliding back into recession if the White House and Congress could not reach a deal on another fiscal rescue package in the coming months. Used auto prices were up 2.3% while new vehicle prices rose 0.8% - the gains were the most since 2010 and 2011, respectively. The cost of visits to doctors increased 0.7% and prices for hospital services rose 0.2%.

Auto insurance costs posted a record monthly increase of 9.3% following company rebates in prior months that accounted for less driving. Medical services were up almost 6% from year-ago levels.

Gasoline prices jumped 5.6% and accounted for about one quarter of the gain in the overall CPI.

Other reports by Click Lancashire

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