US consumer inflation inched up in July but held at a moderate level, government data showed today, as policymakers keep a close eye on price increases while weighing further interest rate hikes.

The Consumer Price Index (CPI), a key inflation gauge, rose 3.2% from a year ago last month, up from June’s 3% pace and breaking a streak of cooling figures.

The Federal Reserve has lifted the US benchmark lending rate rapidly since early last year to ease demand and rein in inflation, with a hike last month bringing rates to the highest level since 2001.

But with the world’s biggest economy showing signs of cooling, officials said they would remain data dependent when making further rate decisions – treading a fine balance between lowering inflation and tipping the economy into a recession.

The CPI held steady in July, rising the same pace as in June on a month-on-month basis, according to Labour Department data.

“The index for shelter was by far the largest contributor to the monthly all items increase, accounting for over 90% of the increase, with the index for motor vehicle insurance also contributing,” said the department.

Excluding the volatile food and energy segments, “core” CPI rose 4.7% from a year ago. – AFP, August 10, 2023.