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U.S. Future Inflation Gauge Rises


...The Economic Cycle Research Institute's U.S. Future Inflation Gauge, which is designed to anticipate cyclical swings in the rate of inflation, rose to 124.0 in July from an upwardly revised 123.3 in June. It was originally pegged at 122.6.

"While remaining below its October high, the (gauge) has crept up in recent months. Thus, underlying inflation pressures may have peaked, but still remain elevated," said Lakshman Achuthan, managing director for ECRI. The October 2005 level was 125.6 with an annualized growth rate of 9.8 percent.

The index's annualized growth rate, which smoothes out monthly fluctuations, rose to 1.7 percent from an upwardly revised 1.6 percent in June. The growth rate was originally pegged at 0.5 percent.

"Forecasting inflation cycles is more complex than simply following the jobs report. The future inflation gauge takes into account international influences on inflation and warns that pressures remain elevated," Achuthan said.