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CPI increase on target
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August 18, 1998: 9:05 a.m. ET
Consumer prices rise 0.2 percent in July, meeting economists' forecasts
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NEW YORK (CNNfn) - U.S. consumer prices rose slightly in July, the Labor Department reported Tuesday, as flat energy prices helped offset gains in food, housing and new vehicles.
The Consumer Price Index, the government's main inflation gauge, rose 0.2 percent, following a 0.1 percent increase in June. July's modest increase should come as welcome news as the Federal Reserve holds an Open Market Committee meeting Tuesday on interest rates.
July's CPI was in line with economists' forecasts. The "core rate," which excludes volatile food and energy prices, also was in line with forecasts of a 0.2 percent increase.
The bond market didn't jump on the news, however, as the 30-year Treasury bond fell 8/32 of a point, driving the yield up to 5.56 percent.
Energy prices were flat in July, compared with 0.7 percent slip in June, as gasoline prices fell 0.2 percent after dropping 0.9 percent in the previous month. Heating and fuel utilities remained flat, compared with a 0.4 percent June decrease.
Airfares jumped 3.2 percent after falling 2.0 percent in June. New-vehicle prices leapt 0.5 percent, matching April 1995's figure as the biggest gain on record. Prices for new vehicles fell 0.3 percent in the previous month.
Medical care costs gained 0.2 percent after jumping 0.4 percent in June, while prescription drugs were unchanged after previously gaining 0.1 percent.
Housing prices climbed 0.1 percent, compared with June's 0.1 percent rise. 
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