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Consumer prices overall increased 3.2% for the 12-month period ending in July, up slightly from June’s 3% rate and the first acceleration in the annual rate in 13 months, according to the latest Consumer Price Index Report released Thursday by the U.S. Bureau of Labor Statistics. 

However, the report also shows that underlying price pressures across a wide range of products and services remain modest. The core price index, which measures inflation without considering the more volatile food and energy categories, declined 0.1% to 4.7% for the 12-month period ending in July, which may deter the Federal Reserve Board from raising the benchmark interest rate again as part of its ongoing effort to slow the economy and cool inflation. 

The index for shelter (+0.4%) accounted for 90% of the overall 0.2% monthly increase in all items, according to the July CPI report. Over the past 12 months, rents have soared 8%. 

Increases in the cost of motor vehicle insurance (+2%), food (+0.2%) and energy (+0.1%) also contributed to the all-items monthly increase. Prices of new vehicles (-0.1%) and used vehicles (-1.3%) declined in July, as did airline fares, which fell 8.1% for the second month in a row. 

The medical care index fell 0.2% in July, after being unchanged the previous month. The index for hospital services decreased 0.4% over the month, while the index for physicians’ services rose 0.2%. The prescription drugs index was unchanged in July. 

The stock market opened higher after the latest CPI data was released, with all three major indexes up. 

The Federal Reserve Board, which has set a target inflation rate of 2%, is set to meet again on Sept. 19-20. At the Fed’s last meeting in July, it raised the benchmark interest rate by a quarter of a point to a range of 5.25% to 5.5%, which is the highest level in 22 years.