A gauge of core US services inflation watched closely by Federal Reserve officials re-accelerated last month, highlighting the potentially bumpy path back to pre-pandemic levels.
(Bloomberg) — A gauge of core US services inflation watched closely by Federal Reserve officials re-accelerated last month, highlighting the potentially bumpy path back to pre-pandemic levels.
The measure rose 4.1% in the 12 months through July, in the first acceleration this year, according to Bloomberg calculations based on Bureau of Labor Statistics data published Thursday. That follows a 4% reading in June which at the time was the lowest in 18 months.
On a monthly basis, the gauge rose 0.2%.
Fed Chair Jerome Powell and his colleagues raised the central bank’s benchmark interest rate last month to the highest level in 22 years. Officials next meet to discuss rate policy in September, and will have additional jobs and inflation data in hand before then. Investors currently expect them to keep rates unchanged.
A similar gauge that also excludes medical-care services, which have been affected in recent months by changes in health-insurer profits, rose 0.4% on a monthly basis, the most since March. That calculation is more consistent with the inflation gauge the Fed officially targets, which is based on the prices of personal consumption expenditures and isn’t affected by health-insurer margins.
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