Inflation remained stable in July despite tariff fears

The Bureau of Labor Statistics (BLS) announced Tuesday that the consumer price index held steady in July. This is much-anticipated data in the market, especially in a turbulent time due to the tariff war unleashed by Trump and the ouster of the statistics chief a few days ago.

According to the data from the BLS, the Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2% on a seasonally adjusted basis in July, after rising 0.3% in June." In addition, "The all items index rose 2.7 percent for the 12 months ending July, after rising 2.7 percent over the 12 months ending June," meaning inflation remained unchanged.

"The index for all items less food and energy rose 0.3 percent in July, following a 0.2-percent increase in June. Indexes that increased over the month include medical care, airline fares, recreation, household furnishings and operations, and used cars and trucks. The indexes for lodging away from home and communication were among the few major indexes that decreased in July," the report continued. 

Housing: The main factor behind the rise in core inflation

However, "the all items less food and energy index rose 3.1 percent over the last 12 months. The energy index decreased 1.6 percent for the 12 months ending July. The food index increased 2.9 percent over the last year."

The BLS pointed to housing as the cause of the increase in core inflation: "The housing index rose 0.2 % in July and was the main driver of the monthly increase in all items. The food index was unchanged for the month, as the food away from home index rose 0.3 %, while the food at home index declined 0.1 %. In contrast, the energy index fell 1.1 % in July, as the gasoline index declined 2.2 % over the month."