**MNI DATA IMPACT: US July CPI As-Expected +0.3%, Core +0.3%>

--Core CPI Above +0.2% Expected; Owners Equivalent Rent +0.2%

--Apparel Prices Up 0.4% Following 1.1% Gain in June

By Kevin Kastner, Brooke Migdon and Alexandra Kelley

     WASHINGTON (MNI) - The July CPI data were at expectations, 

but overall year/year inflation rose modestly, data released by the 

Bureau of Labor Statistics Tuesday showed.

     Overall CPI increased by 0.3%, in-line with Bloomberg and MNI 

forecasts, which predicted a 0.3% gain. Core prices were also up 0.3%, 

coming in above the forecasted 0.2% increase. 

     The year/year rate rose to 1.8% from the 1.6% gain posted in June. 

Excluding only energy, the year/year rate was 2.1% and the year/year for 

core prices increased to 2.2% following a 2.1% reading in June, holding 

in the same tight range seen so far in 2019. 

     Here are some of the key takeaways from the data released Tuesday: 

     - The core CPI reading was up 0.291% unrounded, on the low end 

of a 0.3% reading. 

     - Apparel prices, which were expected to decline modestly in July 

following a sharp increase in June, posted a 0.4% gain in the month. 

     - The major core components were highlighted by widespread 

increases. The large owners' equivalent rent category was up 0.2%, 

growing steadily for the fourth consecutive month and bringing the 

year/year rate up to 3.4%. Medical care increased 0.5% in July and used 

vehicle prices rose 0.9%. New vehicle prices, however, dropped 0.2% 

following a surprise increase in June. Recreation prices posted a flat 

reading.   

     - Energy prices increased by 1.3% in July following a decline in 

June, with gasoline prices rising 2.5%, as expected based on positvie 

data from the July AAA and PPI reports. Electricity prices were also up, 

increasing by 0.6% but gas utilities prices declined by 1.8%. Excluding 

only energy, CPI was still up 0.3%. 

     - Food prices posted a second consecutive flat reading in July, 

with the food at home category falling by 0.1%. In contrast, food away 

from home prices rose 0.3%, a trend predicted by a MNI analysis 

published August 8. Excluding only food, CPI would have been up 0.4%.

     ** MNI Washington Bureau: 202-371-2121 ** 

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