Consumer price index increases 0.2 in July
CPI rises 3.2 yearonyear due to base effects
Core CPI gains 0.2; climbs 4.7 yearonyear
Weekly jobless claims increase 21,000 to 248,000

WASHINGTON, Aug 10 Reuters U.S. consumer prices increased moderately in July as higher rents were mostly offset by declining costs of goods such as motor vehicles and furniture, a trend that could persuade the Federal Reserve to leave interest rates unchanged next month.

The report from the Labor Department on Thursday also showed underlying inflation pressures subsided further last month. The annual increase in prices excluding the volatile food and energy components, the socalled core inflation, was the smallest in nearly two years.

Moderate inflation, together with a cooling labor market, bolstered economists39; conviction that the U.S. central bank will be able to engineer a soft landing for the economy, after a year of handwringing about a recession.

Significant progress on the inflation front has been made, a persistent trend of disinflation is evident, said Sung Won Sohn, a finance and economics professor at Loyola Marymount University in Los Angeles. It is time for the central bank to stop its campaign to beat inflation, it should wait and see for a while.

The consumer price index rose 0.2 last month, matching the gain in June. Shelter accounted for more than 90 of the increase in the CPI, with rental costs increasing 0.4.

Food prices gained 0.2. Grocery food prices increased…