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WASHINGTON, Aug. 16 (Xinhua) -- U.S. consumer prices were flat in July, as the energy prices fell for the first time in five months, said the Labor Department on Tuesday
Consumer Price Index (CPI), a main gauge of inflation, was unchanged in July on a seasonally adjusted basis, compared to an increase of 0.2 percent in June. On a year-on-year basis, the index increased 0.8 percent, down from June's growth of 1 percent, the Labor Department said.
The energy index dropped 1.6 percent in the month, the first decline in five months, while food index was flat. Excluding the volatile food and energy categories, the so-called core CPI went up 0.1 percent in July on a seasonally adjusted basis. The core CPI was up 2.2 percent from a year earlier, slightly lower than June's 2.3 percent increase.
However, the core personal consumption expenditure price index, the Federal Reserve's favored inflation gauge, increased 1.6 percent year on year in June, below the central bank's 2 percent inflation target.
The U.S. Fed could possibly raise interest rate as soon as next month as labor market continues tightening and wage gains start to accelerate, said William Dudley, president of Federal Reserve Bank of New York and a close ally of Yellen, on Tuesday.
Dudley told local media that although the core inflation remained flat in recent months, the inflation seems to be on the trajectory that there is enough economic growth to push up wages and ultimately inflation.
