UPDATE 2 - US consumer inflation annually rises 2.9% in July, slowest increase since March 2021

ADDS PRESIDENT JOE BIDEN'S REMARKS

By Ovunc Kutlu

ISTANBUL (AA) - Consumer inflation in the US annually rose 2.9% in July, the slowest annual increase since March 2021, according to data released Wednesday.

The consumer price index (CPI), which measures changes in the prices of goods and services from a consumer's perspective, came in lower than market estimates of a 3% gain, and slowed down from a year-on-year increase of 3% recorded in June.

The figure is also a sharp decline from the 9.1% annual gain recorded in July 2022, which was the highest since November 1981.

On a monthly basis, CPI showed an increase of 0.2% in July, and came in line with market expectations.

That figure, however, showed an acceleration from June, which had a monthly decline of 0.1%.

"The index for shelter rose 0.4 percent in July, accounting for nearly 90 percent of the monthly increase in the all items index," the Bureau of Labor Statistics said in a statement.

"The energy index was unchanged over the month, after declining in the two preceding months," it added. "The index for food increased 0.2 percent in July, as it did in June."

Core CPI, which excludes volatile food and energy prices, gained just 0.2% in July from the previous month, also coming in line with market estimates, but slightly gaining pace from the 0.1% increase in June.

Annually, core CPI climbed 3.2% in July, marking the smallest annual increase since April 2021, also coming in line with expectations, and decelerating from a 3.3% year-on-year gain recorded in June.

- Housing, gas, electricity

The shelter index annually showed a gain of 5.1% in July, compared to the same month of last year, according to the figures.

"The index for rent rose 0.5 percent over the month and the index for owners' equivalent rent increased 0.4 percent," said the bureau.

While the gasoline index remained unchanged in July, compared to the previous month, the fuel oil index climbed 0.9%.

On an annual basis, the gasoline index plummeted 2.2% in July from the same month in 2023.

The electricity index, meanwhile, rose 0.1% last month, and the index for natural gas fell 0.7%, the figures showed.

The medical care index fell 0.2% in July, while the index for hospital services dove 1.1% last month.

- Wages rising faster than prices for 17 straight months, says Biden

President Joe Biden said the latest figures show that his administration continues to make progress fighting inflation and lowering costs for American households.

"Inflation has fallen below 3% and core inflation has fallen to the lowest level since April 2021," he said in a statement released by the White House. "We have more work to do to lower costs for hardworking Americans, but we are making real progress, with wages rising faster than prices for 17 months in a row."

Biden, however, noted that prices still remain "too high" in the world's biggest economy.

"Large corporations are sitting on record profits and not doing enough to lower prices. That’s why we are taking on Big Pharma to lower prescription drug prices. We’re cutting red tape to build more homes while taking on corporate landlords that unfairly increase rent. And we’re taking on price gouging and junk fees to lower everyday costs from groceries to air travel," he said.

The president argued that Congressional Republicans would raise prices for middle class families, while cutting taxes for billionaires and big corporations.