Air fares dip sharply in July

A sharp decline in the index for airline fares helped keep the July Consumer Price Index for All Urban Consumers (CPI) nearly flat, at a seasonally adjusted increased of just 0.1 percent, according to the U.S. Bureau of Labor Statistics (BLS).

The figures contained in the monthly report on the CPI released August 19 show that airline prices fell 5.9 percent in July after rising 10.9 percent over the previous five months. Overall energy prices, which declined 0.1 percent, also helped offset increases in other categories including food, shelter, medical care services and medical care commodities, which rose 0.4 percent, 0.3 percent, 0.1 per and 0.3 percent, respectively.

Along with the index for airline fares, the indexes for recreation, used cars and trucks, household furnishings and operations, and tobacco all declined in July.

According to the BLS, the increase in airfares earlier in the year were primarily driven by the gasoline index, which was blamed in part on the unrest in the Middle East.

Overall, the index posted its smallest seasonally adjusted increase since February. Over the last 12 months, the all items index increased 2.0 percent before seasonal adjustment.

Despite the good news for July, air fares remain a net of 5.0 percent higher as compared to fares at the end of January.

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