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US inflation picks up in July as core prices rise

WASHINGTON – USA. Consumer prices rose at a robust pace in July, reflecting higher energy prices and most other goods and services. This is a possible sign that inflation is regaining ground after a weak start to the year.

The Consumer Price Index, The US Department of Labor said on Tuesday that the number of goods and services ranging from mutton to motel rooms rose by a seasonally adjusted 0.3% in June and by 1.8% from July 2018 are. Economists surveyed by the Wall Street Journal had expected prices to rise 0.3% mom over the month.

Prices for a range of goods and services rose last month. Energy prices rose in June from June, partially reversing a decline in the previous month, while prices for services such as housing, transport and healthcare also rose. Food prices remained unchanged.

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The so-called core consumer price index, which excludes the categories of volatile food and energy, rose by 0.3% yoy in June and by 2.2% yoy. The monthly increase exceeded the prognosis of the economists for a plus of 0.2%. Adjusted for inflation, the average hourly wages of all non-farm employees fell by 0.1

% in July compared to June. Among those employed in production and non-regulatory affairs, which include most workers, wages fell by 0.2% in real terms.

Compared with July 2018, real earnings increased by 1.3% for all employees and 1.6% for employees in production and non-regulatory matters.

Federal Reserve officials this year frequently expressed concerns about weak inflation, which contradicted their predictions of a strengthening of price pressures in a steadily growing economy.

The Fed is aiming for 2% inflation, as measured by the personal consumption index index, a separate measure that includes many components of the Labor Department's key figures released Tuesday.

Policymakers see low inflation as a threat, as it tends to weigh on interest rates and give them less room to stimulate the economy in a downturn, by lowering borrowing costs. The reference rate for federal funds, which is currently between 2% and 2.25%, is less than half as high as before the last recession.

However, subdued inflationary pressures also allowed the Fed to lower interest rates to avert potential threats to economic growth due to Brexit, the Trump's trade war with China and other risks.

Politicians have voted to cut interest rates by a quarter of a percentage point on 31 July. Market participants expect a further reduction at the Fed meeting from 17 to 18 September.

Write to Paul Kiernan at [email protected] and Sarah Chaney at [email protected]

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