By CountingPips.com
Consumer prices in the U.S. were unchanged in July on a seasonally adjusted basis after advancing the previous two months according to a report released today by the U.S. Department of Labor. The Consumer Price Index had increased by 0.7 percent in June and 
by 0.1 percent in May as energy prices gained some steam before falling in July. On an annual basis for July, consumer prices declined by 2.1 percent from the July 2008 level following a 1.4 percent annual decrease in June. July’s price decline matched economic forecasts that were expecting no change for the month while the annual rate decline surpassed forecasts expecting a 1.9 percent decrease.
Core consumer prices, excluding food and energy prices, increased by 0.1 percent in July following a 0.2 percent advancement in June and have been in positive territory every month of 2009. The annual change in core prices showed a 1.5 percent increase over July 2008 following June’s 1.7 percent annual increase. Market forecasts were predicting core inflation to register a monthly increase of 0.1 percent and an annual increase of 1.6 percent.
Contributing negatively to the consumer price data in July was a decrease in the price for energy as the energy index fell by 0.4 percent in July after advancing by 7.4 percent in June. Food and beverage prices fell by 0.2 percent while apparel prices increased for the second month in a row with a 0.6 percent advance and other goods & services showed the largest monthly gain of 0.8 percent.
UMichigan/Reuters Consumer Sentiment survey falls.
The preliminary consumer sentiment survey by the University of Michigan declined to its lowest level since March this month unexpectedly. The consumer sentiment survey decreased to a 63.2 score in August after a score of 66 in June. August’s score was worse than market forecasts that had predicted the monthly survey would increase to a 69.0 score.
The expectations index, which measures future economic sentiment, decreased from 63.2 in July to 62.1 in August. The current conditions index, which measures current economic sentiment,decreased from 70.5 in July to 64.9 in August. The 1-year inflation expectation dipped a bit from 2.9 in July to 2.8 in August.
US Dollar gains in Forex Trading today.
The U.S. dollar has traded higher in forex trading today after falling mostly for the last two days as the lower consumer confidence number weighed on stock markets and the economic outlook. Overall, the dollar has gained ground versus the euro, British pound, Canadian dollar, Swiss franc, Australian dollar and the New Zealand dollar while the USD has fallen against the Japanese yen as of 2:35pm ET in the afternoon of the US trading session.
EUR/USD Chart – The Euro falling today versus the US Dollar after gaining for the past two days and falling back below the 1.4200 level (hourly chart).
