WASHINGTON – The consumer price index rose 0.5% in July on a seasonally adjusted basis the Labor Department reported Thursday, after an unrevised 0.2% decline in June.
Core consumer prices, excluding food and energy were up 0.2% in July after a revised 0.3% increase in June.
Economists polled by Thomson Reuters had a median estimate of a 0.2% increase for both the overall and core numbers.
Energy prices rose 2.8%, with a 4.7% increase in the price of gasoline. Economists at IHS Global Insight and others warned that "gasoline prices at the pump fell only slightly in July, while the seasonal factors expect a much bigger drop." That would translate into a higher seasonally adjusted price increase for gasoline.
Food prices in June were up 0.4% with dairy products and fruits and vegetables having the largest increases.
In the core index, home ownership, defined as owners equivalent rent, rose 0.3%. It accounts for about a third of the core value. Rental housing, with new demand because of the foreclosure crisis also rose 0.3%..New car prices were flat. Apparel, prescription drugs and tobacco had substantial increases.
Overall services prices were up 0.2%.
Year-over-year the CPI was 3.6% higher, but the core rate, of more interest to the Federal Reserve was up 1.8%, within the Fed comfort zone.
Real average hourly earnings fell 0.1%, seasonally adjusted, in July.
