US inflation remains nears its highest level since 1991, but moderated slightly.
The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.5 percent in July on a seasonally adjusted basis after rising 0.9 percent in June, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 5.4 percent before seasonal adjustment.
The indexes for shelter, food, energy, and new vehicles all increased in July and contributed to the monthly all items seasonally adjusted increase. The food index increased 0.7 percent in July as five of the major grocery store food group indexes rose, and the food away from home index increased 0.8 percent. The energy index rose 1.6 percent in July, as the gasoline index increased 2.4 percent and other energy component indexes also rose.
US Real Average Hourly Earning YoY “rose” to -1.2% as core inflation “moderated” to +4.3%, the second highest reading since 1991.
Core inflation remains at 1991 levels.
With core CPI growing at 4.3%, the baseline Taylor Rule model implies that the Fed Funds target rate should be 7.05%, not the current rate of 0.25%.
As The Fed keeps rolling the dice on zero-interest rate policies.