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US inflation slackens for July as dollar sinks, oil rises

By Capital.com News

12:20, 11 August 2021

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Bar chart with American flag motif
US inflation – Photo: Shutterstock

The US consumer price index rose 0.5% last month against June’s CPI reading of a 0.9% gain, suggesting a slight cooling of the US economy’s COVID recovery.

In the 12 months through July, the CPI was up 5.4%.

Oil futures sank by 1% to $67.55 a barrel following the data release, but climbed by midday to test $69. Gold rose steadily following the data release to reach $1,753 by noon.

The US dollar dropped sharply against the Euro and the Pound.

Core CPI – which excludes volatile food and energy components – accelerated 0.3% after ticking up 0.9% in June. On a year-to-year basis core CPI has surged 4.3%.

Oil - Crude

80.70 Price
+1.760% 1D Chg, %
Long position overnight fee -0.0106%
Short position overnight fee -0.0029%
Overnight fee time 22:00 (UTC)
Spread 0.03

Gold

1,753.72 Price
+0.140% 1D Chg, %
Long position overnight fee -0.0182%
Short position overnight fee 0.0070%
Overnight fee time 22:00 (UTC)
Spread 0.18

Natural Gas

6.89 Price
-5.300% 1D Chg, %
Long position overnight fee 0.0593%
Short position overnight fee -0.0879%
Overnight fee time 22:00 (UTC)
Spread 0.005

Silver

21.74 Price
+1.960% 1D Chg, %
Long position overnight fee -0.0185%
Short position overnight fee 0.0064%
Overnight fee time 22:00 (UTC)
Spread 0.020

Close to consensus

The data fell close to the consensus view. Economists were expecting CPI to edge lower, to 5.3% on a yearly basis, following a 13-year high of 5.4% announced in June. Core CPI had been forecast to retreat to 4.3% from 4.5%.

CPI is the most widely used measure of inflation and viewed as a key indicator for economic policymakers such as the US Federal Reserve.

Although the latest inflation reading showed a slackening in pace, it is still faster than normal. Used cars and truck prices have been the main driver of inflation in recent months as a global chip shortage has hit new motor vehicle production, prompting buyers to tap the used market.

The CPI and other price measures have been rising this year due to a comeback in consumer spending and US output.

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