CPI Rose 0.5% in July

The index is higher than expected, although core CPI was below views.
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The U.S. government doled out a double-shot of mixed economic news Tuesday, saying consumer prices were slightly higher than expected last month while the real estate market continued to sizzle.

The July consumer price index rose 0.5% in July, one tenth of a percent higher than economists expected. The core CPI, which excludes food and energy prices, rose 0.1%, one tenth of a percent lower than expected.

In a separate report, the government said construction on new homes began in July at an annualized rate 2.04 million, about 20,000 higher than expected. New permits for building were issued at a 2.16 million annualized rate during the month, also higher than forecast.

Together, Tuesday's numbers moderately heighten the risk profile for inflation in the U.S. economy, a trend that has been addressed in 10 consecutive quarter-point interest rate hikes by the

Federal Reserve

. Economists generally expect the Fed to continue raising rates through the remainder of 2005.

Stocks and bonds had little reaction to the reports, with the yield on the 10-year Treasury note holding steady at 4.28% and futures on the

S&P 500

easing slightly.