Inflation held in check on manufacturing figures
August 16, 2005
Inflation seemed to be relatively in check in the US in July, with the exception of energy prices, while US industrial production was down more than expected on the month. The Federal Reserve reported on Tuesday that US industrial production was up only 0.1 percent overall in July.
Output increases from factories and utilities were slower than in June, and mining output fell. Factory output was up 0.1 percent in July after an increase of 0.4 percent in June, while utilities output was 0.7 percent higher in July. That was much less than June’s output growth of 4.6 percent. Output from mines was down for the second time in three months at 1.3 percent lower.
The overall increase in output was smaller than had been expected, but analysts still expect increases in output for the rest of the year.
Meanwhile, the Labor Department said that the Consumer Price Index was up 0.5 percent in July, mostly due to hikes in energy prices. Still, prices remained relatively stable outside of energy and food, so that the core inflation rate was up only 0.1 percent on the month. July energy costs were up 3.8 percent, with gasoline prices up 6.1 percent.
Food costs as a whole gained 0.2 percent, while fruit prices gained 2.8 percent. Conversely, new car prices fell 1 percent in July, due to discounting by manufacturers. So far, the annual rate of inflation is 3.5 percent, and the core inflation rate is up at a 2.2 percent annual rate so far.