WASHINGTON (8/20/14)--After climbing briskly from April to June, the consumer price index edged up 0.1% in July, according to the Labor Department.
The slowdown was fueled by a 0.3% drop in the energy index, with all energy categories falling, including gasoline, electricity, fuel oil and natural gas (
Tepid inflation growth, for some, reinforces a widely held view that the Federal Reserve won't begin raising short-term interest rates, which it has kept low to stimulate the economy, until inflation normalizes sometime next year.
"This latest inflation reading confirms our view that the Fed will wait until mid-2015 for a liftoff," Gregory Daco, Oxford Economics lead U.S. economist, told
Both headline and core inflation now sit at about 2% on a year-over-year basis, according to Moody's.
Consumer prices have advanced for nine straight months, but July's reading was the weakest since February.
Food and beverage prices rose 0.4% after a 0.1% gain in June and sit 2.6% higher year-over-year. Medical care, apparel and new-vehicle prices also all ticked up.
Used vehicles, tobacco, airline fares and household furnishings, however, all reported weak months.
"A sustained pickup in consumer prices is facing challenges because fresh weakness in the global economy is exerting deflationary pressures," said Arijit Dutta, Moody's analyst (
). "Import prices fell and producer prices barely rose in July, differing from the generally strong readings this year."