Consumer Price Index Stays Flat

WASHINGTON (TheStreet) -- The boogeyman of inflation stayed in the closet in July. On Friday, the Labor Department reported that the Consumer Price Index matched estimates and stayed unchanged in July compared to the prior month.

Indeed, since July of last year, the index has slumped by 2.1%, largely due to declining energy prices. That's the largest annual drop since the 1950.

In recent weeks, oil companies such as Chevron(CVX Quote), Exxon Mobil(XOM Quote), ConocoPhillips(COP Quote), Total(TOT Quote), BP(BP Quote) and Royal Dutch Shell(RDS.A Quote) reported slumping earnings as declining commodity prices since last summer's astronomical highs thumped bottom lines.

Excluding food and energy, the core index rose by 0.1% in July, paced by growth in apparel, transportation and medical care. The index for other goods and services jumped by 0.8% largely because of tobacco tax increases in several states.

In fact, strength in tobacco sales and pricing are but one reason that shares for Altria(MO Quote), Philip Morris(PM Quote) and Reynolds American(RAI Quote) have been on an upswing since the year began.

The housing index fell by 0.2%. More volatile energy and food prices dropped 0.4% and 0.3%, respectively.

-- Reported by Sung Moss in New York