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Core inflation of US consumers far exceeds expectations

(Bloomberg) – A key consumer price measure in the US rose more than expected in June, which could complicate the Federal Reserve's assessment of inflation, as policymakers are pushing for a reduction in consumer prices. interest as early as this month.

The basic index of consumer prices, which excludes food and energy, rose 0.3% from the previous month, its highest level since January 2018, and 2, 1% compared to the previous year, revealed Thursday data from the Department of Labor. Both figures exceeded estimates. The CPI as a whole climbed 0.1%, also more than expected, and 1.6% a year.

The report showed large monthly gains in basic categories, including coverage of shelter costs, used cars, clothing, home accessories and operations. US stock futures dipped after the report, while the 10-year US Treasury yield rose.

Fed Chairman Jerome Powell told lawmakers on Wednesday that there is a risk "that low inflation remains even more persistent than we currently expect." In addition, on Wednesday, the minutes of the June policy meeting showed officials deemed that the uncertainties and risks weighed on the government. the economic outlook had increased considerably, pleading for a rate cut at their July 30-31 meeting.

Inflation, measured by the Fed's preferred tonnage, was 1.5% in May and was below target for almost seven years, while the tightly watched core index rose 1.6%. President Donald Trump, who, along with his staff, has repeatedly lobbied the Fed to cut rates to support growth, also cited low inflation as a reason for easing it.

The IPC report showed that prices for used cars and trucks were up 1.6% from the previous month and 1.2% from the previous year. Clothing, which has been volatile in recent months, has risen 1.1% over the month while declining by 1.3% a year.

Energy prices fell 2.3% from the previous month, as gasoline prices fell 3.6%. The costs of the food were unchanged.

Housing costs, which account for about one-third of the total CPI, rose 0.3% over the month, in line with rents equivalent to those of the homeowner, one of the price tracking categories rent. Rent of principal residence increased by 0.4%.

A separate report released Thursday by the Labor Department showed that jobless claims had dropped to the lowest level since mid-April, reinforcing the signs of an employment market robust.

Unemployment claims dropped from 13,000 to 209,000 during the week ended July 6, which is lower than a Bloomberg survey of economists predicting 221,000. The reference period included vacation July 4th, which could add to the volatility of the readings.

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The index of furniture and household goods increased 0.8% from the previous month, its highest level since 1991, reflecting a record 6.1% jump for food and beverage services. gardening and lawn care. A separate report from the Labor Department on Thursday showed how inflation affects the purchasing power of consumers. Average hourly earnings, adjusted for price changes, increased 1.5% over the previous year, following a gain of 1.3% in May. Economists surveyed by Bloomberg had predicted that the core tonnage would rise 0.2% from the previous month and 2% from the previous year. the broader index remained unchanged from the previous month and slowed from 1.8% in May to 1.6% a year.

(Updates to add market reaction in the third paragraph, the chart and the "More Objects" section.)

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