Inflation remained tame in July, despite hefty price increases for a scattering of products and services ranging from tomatoes to tobacco and from autos to air fares.
The Labor Department said Tuesday that its Consumer Price Index rose a seasonally adjusted 0.2 percent last month, as anticipated by analysts. For the year so far, inflation is running at a modest 1.5 percent annual rate, compared with 1.7 percent for all of last year.
Despite robust U.S. economic growth until very recently, inflation has remained contained, in part because the Asian economic crisis has contributed to a decline in world prices for commodities ranging from petroleum to pork.
Economists believe the lack of price pressures will lead Federal Reserve policy-makers, meeting behind closed doors today, to again opt for no change in short-term interest rates. They haven't raised or lowered rates in 17 months.