Core inflation rose 0.1% month-over-month in July, a slight miss from what 0.2% increase economists had been expecting.
Headline CPI, which includes all items, also rose 0.1% over last month and 2% over last year, right in-line with expectations.
This reading marks the lowest increase for the headline index since February.
Over last year, core inflation rose 1.9%, in-line with expectations.
Expectations were for "Core" CPI, which excludes food and gas — which tend to be more volatile — to rise 0.2% over last month and 1.9% over last year.
Looking at some of the reports sub-indexes, energy prices fell 0.3% in July compared to the prior month, the first month-on-month decline since March, as each component of the energy component fell over the prior month.
The food sub-index rose 0.4% month-over-month, which the BLS notes is the fifth time in the last six month that food prices have increased by at least that much. In the last year, the index for meat, poultry, fish, and eggs has increased 7.6%. The price of dairy and related products is also up 4.3% in the last 12 months.
Following the report, Ian Shepherdson at Pantheon Macro said, "In one line: Unthreatening, but rents are gathering momentum."
Shepherdson added that, "Overall, a non-threatening report, but watch the pick-up in rents, with primary up 3.3% y/y and OER up 2.7%, fastest since '09 and '08 respectively and trending up, thanks to the continued decline in rental vacancies."
CPI isn't the Fed's preferred measure of inflation — that would be the personal consumption expenditures, or PCE report — but with both metrics remaining well below the Fed's 2% target, the central bank hasn't been pressured to raise interest rates.
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