Consumer and Producer Prices Decelerate for July

According to the National Association of Manufacturers’ (NAM) Monday Economic Report for this week, the Consumer Price Index has risen 8.5% over the past 12 months, pulling back from 9.1% in June, which was the fastest since November 1981. Core inflation (which excludes food and energy) increased 5.9% YoY in July.

Compared to last month, consumer prices were flat in July after soaring 1.3% in June. Declining energy costs, which fell 4.6% in July, helped provide some welcome relief, with gasoline prices off 7.7%. At the same time, food prices continued to grow solidly, up 1.1% for the month.

Excluding food and energy, core consumer prices rose 0.3% in July, easing from 0.7% growth in June. Prices for household furnishings and supplies (+0.6%), medical care commodities (+0.6%), new vehicles (+0.6%), shelter (+0.5%) and medical care services (+0.4%) were notably higher in July, but these cost increases were mitigated somewhat by reduced prices for transportation services (-0.5%), used cars and trucks (-0.4%) and apparel (-0.1%).

Over the past 12 months, producer prices for final demand goods and services in July have risen 9.8%, down from 11.3% YOY in June. Food and energy costs have soared 15.0% and 36.7% YoY, respectively Core producer prices increased 5.8% YoY, continuing to slow since March’s record 7.1%.

Compared to last month, producer prices for final demand goods and services fell 0.5% in July, pulling back from the 1.0% gain in June – the first decline since April 2020. Excluding food and energy, producer prices for final demand goods increased 0.2% in July, slowing from the 0.4% gain in June.  Energy prices plummeted 9.0% in July, pulling the headline number lower, but food costs rose 1.0% for the month.