• In a surprise, July inflation came in much higher than the consensus for both all-items and core inflation. Gas prices again were a big factor.
• The recent surge in inflation now has the Social Security COLA on track for a 1.0% increase in 2021. But two volatile months of data remain.
• I Bond investors now look likely to get a positive inflation-adjusted variable rate at the November 1 reset.

U.S. inflation in July blew by consensus forecasts, reflecting strong price increases in many categories across the economy, even though food prices declined in the month.

The Consumer Price Index for All Urban Consumers increased 0.6% in July on a seasonally adjusted basis, the same increase as in June, the U.S. Bureau of Labor Statistics reported today. That was double the expected increase of 0.3%.

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