U.S. consumer prices reportedly grew slowly in July despite being at a 13 -year high parast on annual counts. At the same time these data carry a temporary indication that inflation has already reached its peak.
The consumer price index rose 0.5% last month after rising 0.9% in June based on data released Wednesday. In the 12 months to July, the CPI increased by 5.4%.
The CPI excluding food and energy components recorded an increase of 0.3% after increasing 0.9% in June. This increase is the smallest increase in 4 months since February.
The core CPI increased 4.3% year -on -year after increasing 4.5% in June. According to analysts at TD Securities in New York think that this reading is more modest than expected.
The rapid pace of the economic recovery has caused a gap between demand and supply in several key sectors as business sectors strive to increase their inventories and overcome supply chain hurdles caused by the Covid-19 pandemic.
Low interest rates and nearly $ 6 trillion in government aid have also boosted demand, causing rising price pressures. The global semiconductor shortage has hampered automatic production, pushing up the prices of used cars and trucks, while at the same time accounting for the bulk of the rise in inflation in recent months.
Earlier, Fed chairman Jerome Powell said the central bank would continue to monitor inflation readings and was of the view that high inflation readings were only temporary.
Although the inflation reading has peaked but it is expected to start stabilizing in 2022 as travel services are still not fully operational. On the other hand, investors remained cautious for fear of the Fed moving faster than expected.
