U.S. consumer prices rose slightly in July, with gasoline costs increasing at a slower pace, the government reported Thursday, indicating that overall inflation remains mild. The Labor Department said its consumer price index (CPI) rose 0.2 percent last month after a 0.5 percent gain in June. The July increase, which was in line with economist expectations, came as prices increased for new autos, clothing, tobacco, medical care, and housing. Gasoline prices rose only 1 percent in July after jumping 6.3 percent the previous month. Excluding volatile energy and food costs, core CPI rose 0.2 percent for the third consecutive month. In the 12 months ending in July, the CPI advanced 2 percent, the biggest year-over-year increase since February. Core CPI has increased 1.7 percent over the past year. The core CPI reading is below the U.S. Federal Reserve's (Fed's) 2 percent annual inflation target, though the increase in the overall CPI to 2 percent could comfort some central-bank officials who have warned of the potential dangers of inflation running too low. The slight increase in consumer prices supports the view of Fed Chairman Ben Bernanke that recent low inflation was temporary.
