A carefully watched measure of US inflation will most likely show more of the moderate price increases that the Federal Reserve wants to see sustained, according to Bloomberg.
The consumer price index is expected to grow 0.2% in July after removing food and energy costs, marking the smallest back-to-back gains in 2 1/2 years. Economists and Fed officials believe that this core metric is a better predictor of underlying inflation.
The Labor Department’s underlying gauge is expected to grow 4.8% year on year, according to the median expectation in a Bloomberg survey of analysts conducted before Thursday’s release.
While this is identical to June, the figure is projected to fall in the coming months because core inflation surged in August and September of last year.
“The job market is cooling, providing a disinflationary impulse to the most stubborn inflation categories that is expected to last the rest of the year; the FOMC’s July rate hike was likely the last before an extended pause,” according to Bloomberg Economics.
