US consumer prices rose for the sixth month in a row in July, suggesting inflationary pressures are beginning to stabilise.
Figures from Labour Department today showed the consumer price index nudged up 0.1 per cent last month. This just missed economists' expectations for a 0.2 per cent rise.
At the same time, consumer prices rose 0.2 per cent on an annual basis, the second month of year-on-year gains. Core prices increased 1.8 per cent from the same time a year earlier. This was the fourth time in five months the 12-month change was 1.8 per cent.
US inflation has been abnormally low since global oil prices started to slide towards the middle of last year. However, today's data suggests it could be starting to firm again. Nevertheless, gains are likely to be muted thanks to a strong dollar, persistently low global oil prices and a weakening renminbi.
Fed officials have previously said they could start to raise rates as early as September if the economy improves as expected. They've indicated that they don't need inflation to be higher before this, just an assurance it will return to the two per cent target.
Market attention now turns to the release of the US Federal Reserve's July interest rate meeting, due later today. Economists will be combing through for clues about whether the US is on course to raise rates for the first time since the financial crisis.