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The Labor Department earlier this morning reported that the Consumer Price Index gained a modest 0.2% in July. That was in line with expectations, and materially lower than the June estimated increase of 0.5%. The estimate for June was not revised.

Meanwhile, if we back out the often volatile food and energy components from the mix, to get the so-called core CPI reading, we find that the gain was also 0.2% for the latest month, which likewise provided no surprises. Energy and food costs each rose by 0.2%, in one of the more stable overall performances in this inflation area in months.

As to individual components, the costs of housing were unchanged last month, following gains ranging from 0.1% to 0.3% from March through June. Price categories that increased in July were apparel (up 0.6%), transportation (up 0.5%), prescription drugs (up 0.5%), gasoline (up 1.0%), and tobacco (up 1.4%). Medical care costs, meantime, gained just 0.2%, a modest increase from a cost component that has often been troubling to many Americans.

Falling in price in July were utility costs, household furnishings, used car prices, and airline fares. Overall, prices rose by 2.0% during the past year, the largest increase since February. The core CPI gained 1.7%. It is this last category that is most often considered by the Federal Reserve when it formulates monetary policies.

Thus, with the very popular bond-buying initiatives are likely to soon undergo some tapering, as the lead bank begins to move toward a conclusion of this program sometime next year, the latest pricing data should not serve to delay this process, which some think could begin as early as next month.

At the time of this article's writing, the author did not have positions in any of the companies mentioned.