US core consumer prices rose at a slightly slower rate in July, official figures showed today.
The Labour Department said its core consumer price index, an inflation gauge that strips out volatile food and energy costs, rose 0.2 per cent in July - breaking a four-month string of 0.3 per cent increases. Overall, consumer prices were up 0.4 per cent in July after a 0.2 per cent gain in June.
Separately, the Commerce Department said housing starts fell 2.5 per cent in July to an annual pace of 1.795 million units, from a downwardly revised 1.841 million unit pace in June. It was the slowest rate of starts since May 2003.
The overall increase in consumer prices during July matched Wall Street economists' predictions but the rate of the core rise came in below estimates for a 0.3 per cent rise.
Energy prices climbed a seasonally adjusted 2.9 per cent in July after falling 0.9 per cent in June. But costs for apparel fell 1.2 per cent after being flat in June. Goods and services - a category that covers goods like personal care items and tobacco - fell 0.2 per cent last month after rising 0.6 per cent in June.
"It does provide some relief but it's too early to declare victory over inflation," said economist Richard DeKaser of National City Corp. in Cleveland. "It takes more than one month of a 0.2 per cent increase (in core prices) after several months of 0.3 per cent increases."
So far during the first seven months of 2006, core consumer prices have risen at a 3.1 per cent annual rate, compared with 2.2 per cent in the comparable period of 2005. The department said about 80 percent of the acceleration in core prices so far this year was accounted for by rising costs of shelter, such as rents.