UBS Economics-US Economic Perspectives _July CPI recap Ongoing progress_ ...-109852207(1)

ab14August2024GlobalResearchandEvidenceLabUSEconomicPerspectivesJulyCPIrecap:OngoingprogressHeadlineCPI+0.15%:12-monthinflationedgesdownto2.9%�TheheadlineCPIincreased15bp(seasonally-adjusted)inJulywith12-monthCPIinflationedgingdownfrom3.0%inJuneto2.9%inJuly—itslowestlevelsinceMay2021.Energypriceswereessentiallyunchanged,andbothfoodprices(+16bp)andcoreprices(+17bp)increasedatmoderatepacesthatwouldnotbeoutoflinewiththeirpre-pandemictrends.The0.15bpheadlineCPIchangeinJulywasalittlebelowbothourexpectationsandthoseofconsensus(UBSEconprojection+0.19%,UBSNowcast+0.17%,Bloombergconsensusaverage+0.20%).�TheCPIforfoodawayfromhome(i.e.restaurants)increased21bpinJuly—closetotheirpre-pandemicpace(23bp).Thesizeoftheseincreaseshastrendeddownoverthepastcoupleofyears,buttheyhadpickedupoverthefewmonthspriortotoday´sreport.Alongwithrents(discussedbelow),foodawayfromhometendstobeoneofthemorepersistentcomponentsandoneofthebettermeasuresofthecurrentinflationtrend.Thereforetheslowinginthiscomponentisaverygoodsignforslowinginflation.CoreCPI+0.17%:12-monthcoreinflationedgesdownto3.2%�CoreCPIpricesrose17bpseasonally-adjustedinJuly—anincreasethatwouldnotbeoutofplacepre-pandemic.ThiscoreCPIincreasewasjustatouchbelowbothourexpectationsandthoseofconsensus(UBSEconprojection0.19%,UBSNowcast0.17%,consensusaverage0.19%).�Julywascontin...