Consumer prices held steady last month, as falling energy prices largely canceled out slight increases in food, clothing and shelter.
The government’s key measure of inflation, the Consumer Price Index, showed consumer prices were unchanged in July. Economists had expected prices to edge up 0.2% over the month, largely driven by rising food prices.
But despite the Midwest drought, food prices only ticked up 0.1%.
Meanwhile, energy prices fell 0.3%, clothing prices rose 0.2% and the cost of shelter rose 0.1%.
Medical care prices rose 0.3%, and airfares declined 2.7%.
On an annual basis, the CPI was up 1.4%, a slowdown from June when it was up 1.7%.
Tame prices could give the Federal Reserve some leeway to stimulate the economy at its next meeting in September. The central bank aims to keep core inflation around 2% a year. That measure, which strips out food and energy prices, is currently up 2.1%.
