The consumer price index rose 3.2% year-over-year last month, marking an end to 12 consecutive months of decline, according to the Bureau of Labor Statistics.
The Bureau of Labor Statistics released its report on Thursday, sharing that prices accelerated a seasonally adjusted 0.2% in July and that the annual rate was slightly below the 3.3% forecast but still higher than it was in June.
According to the bureau, more than 90% of the increase was caused by the jump in housing costs, which rose 0.4% last month and were up 7.7% from a year ago. The bureau noted that rents increased by 0.4%.
Other categories to see an increase included food, which went up 0.2% in July, and energy, which increased 0.1%.
Areas that declined included used cars, which dropped 1.3%; airline fares, which fell 8.1% and are down 18.6% from a year ago; and medical care services, which decreased 0.4%. A double-digit decrease in airline fares is obviously the bright spot in the latest numbers.
"The trend is undeniable: After spiking last summer amid record inflation nationwide, airfare has been steadily dropping in 2023," Thrifty Traveler reported. There are even domestic flights below $100. See them here.
While overall inflation moved slowly upward, real wages moved with it, increasing 0.3% on the month and up 1.1% from a year ago, according to the Bureau of Labor Statistics.
Despite some prices for goods and services remaining in a solid place, falling from their post-pandemic highs, the country is still unlikely to return to the pre-pandemic normal.
“It’s a very long journey from the peak inflation rates we saw just a year ago,” Mike Pugliese, director and senior economist at Wells Fargo, shared with NBC News. “We are pretty unlikely to see outright deflation unless we get a very severe recession,” he added.
The Federal Reserve also decided to raise interest rates again this month as it works to fight inflation into the high 2% range. So while prices are lower, interest rates are expected to remain high.
“While inflation is moving in the right direction, the still-elevated level suggests that the Fed is some distance from cutting rates,” Seema Shah, chief global strategist at Principal Asset Management, shared with CNBC. “Indeed, disinflation is unlikely to be smooth and will require some additional economic pain before the 2% target comes sustainably into view.”
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