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The consumer price index (CPI) rose 3.2% year over year in July, marking the first significant increase in over a year. However, this was slightly below the anticipated 3.3% forecast. On a monthly basis, prices saw a seasonally adjusted increase of 0.2%, aligning with the Dow Jones estimate, as quoted on CNBC.
Barring the volatile sectors of food and energy, the core CPI also rose by 0.2% for the month. This translates to an annual rate of 4.7%, the lowest since October 2021, and slightly below the Dow Jones consensus estimate of 4.8%.
Against this backdrop, below we highlight a few sectors and their ETFs that could gain ahead.
Shelter and Real Estate
The primary driver for the monthly inflation increase was shelter costs, which surged by 0.4% sequentially and are up 7.7% year over year. The Bureau highlighted that over 90% of the inflation increase was attributed to this category, which constitutes about a third of the CPI weighting.
Investors can consider ETFs like the iShares U.S. Real Estate ETF (IYR - Free Report) or the Vanguard Real Estate Index Fund (VNQ - Free Report) to gain exposure to this sector, which is experiencing strong demand and rising prices. Both funds have Zacks Rank #3 (Hold).
Restaurants
The food index increased 0.2% sequentially in July. The food away from home index rose 0.2% sequentially in July but crept up 7.1% year over year. Investors may consider ETFs focused on the restaurant industry, such as AdvisorShares Restaurant ETF (EATZ - Free Report) to capitalize on the trend.
Transportation Services
The index rose 0.3% sequentially and 9% year over year. The data puts focus on SPDR S&P Transportation ETF (XTN - Free Report) . The Zacks Rank #2 (Buy) fund offers exposure Cargo Ground Transportation (31.22%), Passenger Airlines (26.24%), Air Freight & Logistics (17.85%) and Marine (9.34%).
Medical Care Commodities
The index recorded a sequential gain of 0.5% in inflation. Inflation gained 4.1% year over year. The Zacks Rank #2 ETF iShares U.S. Medical Devices ETF (IHI - Free Report) , hence, draws attention. Health Care Equipment (80.34%) takes the top spot in the fund, followed by Life Sciences Tools & Services (19.29%).
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Sector ETFs Likely to Gain on July Inflation Data
The consumer price index (CPI) rose 3.2% year over year in July, marking the first significant increase in over a year. However, this was slightly below the anticipated 3.3% forecast. On a monthly basis, prices saw a seasonally adjusted increase of 0.2%, aligning with the Dow Jones estimate, as quoted on CNBC.
Barring the volatile sectors of food and energy, the core CPI also rose by 0.2% for the month. This translates to an annual rate of 4.7%, the lowest since October 2021, and slightly below the Dow Jones consensus estimate of 4.8%.
Against this backdrop, below we highlight a few sectors and their ETFs that could gain ahead.
Shelter and Real Estate
The primary driver for the monthly inflation increase was shelter costs, which surged by 0.4% sequentially and are up 7.7% year over year. The Bureau highlighted that over 90% of the inflation increase was attributed to this category, which constitutes about a third of the CPI weighting.
Investors can consider ETFs like the iShares U.S. Real Estate ETF (IYR - Free Report) or the Vanguard Real Estate Index Fund (VNQ - Free Report) to gain exposure to this sector, which is experiencing strong demand and rising prices. Both funds have Zacks Rank #3 (Hold).
Restaurants
The food index increased 0.2% sequentially in July. The food away from home index rose 0.2% sequentially in July but crept up 7.1% year over year. Investors may consider ETFs focused on the restaurant industry, such as AdvisorShares Restaurant ETF (EATZ - Free Report) to capitalize on the trend.
Transportation Services
The index rose 0.3% sequentially and 9% year over year. The data puts focus on SPDR S&P Transportation ETF (XTN - Free Report) . The Zacks Rank #2 (Buy) fund offers exposure Cargo Ground Transportation (31.22%), Passenger Airlines (26.24%), Air Freight & Logistics (17.85%) and Marine (9.34%).
Medical Care Commodities
The index recorded a sequential gain of 0.5% in inflation. Inflation gained 4.1% year over year. The Zacks Rank #2 ETF iShares U.S. Medical Devices ETF (IHI - Free Report) , hence, draws attention. Health Care Equipment (80.34%) takes the top spot in the fund, followed by Life Sciences Tools & Services (19.29%).