Reflecting higher prices for shelter, food, energy, and new vehicles, the Labor Department released a report on Wednesday showing consumer prices in the U.S. increased in line with economist estimates in the month of July.
The Labor Department said its consumer price index climbed by 0.5 percent in July after jumping by 0.9 percent in June.
Economists had expected consumer prices to rise by 0.5 percent following the advance in the previous month, which reflected the biggest increase since June of 2008.
Compared to the same month a year ago, consumer prices in July were up by 5.4 percent, unchanged from the annual rate of growth seen in June. The pace of growth was expected to dip to 5.3 percent.
The monthly increase in consumer prices was partly due to a 1.6 percent jump in energy prices along with a 0.7 percent advance in food prices.
Excluding the higher food and energy prices, core consumer prices rose by 0.3 percent in July after surging by 0.9 percent in June. Economists had expected core prices to increase by 0.4 percent.
Along with increases in prices for shelter and new vehicles, the uptick in core prices reflected higher prices for recreation, medical care, and personal care.
The annual rate of growth in core prices slowed to 4.3 percent in July from 4.5 percent in June, matching economist estimates.
"We believe June marked the peak in the in the annual rate of inflation as the strong base effects are subsiding and wholesale price increases for used cars and trucks have moderated greatly," said Kathy Bostjancic, Chief U.S. Financial Economist at Oxford Economics.
She added, "That said, price increases stemming from the reopening of the and ongoing supply chain bottlenecks will keep the rate of inflation elevated and sticky as supply/demand imbalances are only gradually resolved."
Bostjancic shares the Federal Reserve's view that "this isn't the start of an upward wage-price spiral" but still expects inflation to remain persistently above 2 percent through 2022.
On Thursday, the Labor Department is scheduled to release a separate report on producer price inflation in the month of July.
Economists currently expect producer prices to advance by 0.6 percent in July after jumping by 1.0 percent in June.
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