The Extended National Consumer Price Index (IPCA) of July changed by 0.01%, being significantly below the 0.40% rate recorded in June. This is the lowest rate since 2010, when figures were 0.01% in July and 0.00% in June. In spite of that, the cumulative index in the year stayed at 3.76%, above the 3.18% of the same period in 2013. Considering the last twelve months, the index was 6.50%, being below that of the immediately previous months. In July 2013, the rate was 0.03%.

The complete publication is available at www.ibge.gov.br/home/estatistica/indicadores/precos/inpc_ipca/defaultinpc.shtm.

Deceleration in July was strongly influenced by the following groups: Transportation, with decrease of 0.98% versus rise of 0.37% in June, and Personal expenses, which changed from 1.57% in June to 0.12%.  Among the nine groups of products and services surveyed, four recorded decrease:

In the item air fares the decrease of 26.86% was the main downward impact, with - 0.14 percentage points. In Transportstion, most of the items recorded decrease in the month, ethanol (-1.55%), tires (-1.01%), gasoline (-0.80%), lubrication and washing (-0.67%), car repair (-0.54%) accessories and pieces (-0.40%), new cars (-0.29%), motorcycles (-0.14%) and used cars (-0.09%).

In Personal expenses ther items faced decrease from one month to the other, one example being hairdressing services, which changed from 0.47% to -0.08%. the item domestic workers resulted in 0.52%. As an exception, since the May data about the Monthly Employment Survey (PME) for Salvador and Porto Alegre are currently unavailable, the methodology was adapted for the calculation of the item domestic workers.

In Personal expenses hotels were the main highlights, 7.65% cheaper after the rise of 25.33% recorded in June. Other items faced decrease from one month to the other, one example being hairdressing services, which changed from 0.47% to -0.08%. The item domestic workers resulted in 0.52%. As an exception, since the May data about the Monthly Employment Survey (PME) for Salvador and Porto Alegre are currently unavailable, the methodology was adapted for the calculation of the item domestic workers. The adapted methodology consisted of using the two latest incomes available in the two regions, relative to the month of April, to reach the trend of the July series. This way, from Aril on, the estimation was made three months ahead, instead of two, as it had been done lately. The other areas followed the regular procedures described in the technical note 02/2007, with estimations two months ahead considering the income of May collected through PME.

In relation to food and beverages (from -0.11% in June to -0.15% in July), there was fall of prices for the fourth consecutive month. The decrease was even more significant if one considers food at home, with -0.51%. Prices fell up to 2.26% in Campo Grande and only in São Paulo was there increase of 0.25%. In the item food away from home (from 0.82% to 0.52%) there was increase, although smaller than in the previous month. The highlight was beer, with price rises of 1.63%.

Among the few highlights in food products with price rises can be mentioned: milk (2.16%) and some of its derivatives, such as cheese (1.82%), powdered milk (0.87%) and yogurt (0.52%), besides ground coffee (1.34%) and chicken pieces (1.26%). Several items becamecheaper, especially potatoes(-18.84%) and tomatoes (-17.33%):

The groups Apparel (from 0.49% in June to -0.24% in July) and Communication (from -0.02% to -0.79%) also recorded increase. Considering Apparel, sales which occurred in this period led the prices of women's clothing to fall by up to 0.72%. Communication was affected by the metropolitan area of São Paulo, where fixed telephone lines became 8.52% chaper, on the average, since in the end of July there was 24.30% decrease in the subscription fee, covering the period from June 04 on.

The groups Housing (from 0.55% to 1.20%) and Household articles (from 0.38% to 0.86%) were the highlights due to the acceleration from one month to the other. Housing was the item which recorded the highest result, considering that electricity reached 4.52% and, with 0.12 percentage points, accounted for the most significant impact on the month's IPCA. Rise was also observed in condominium fees (0.95%) and rent (0.92%). In electricity, , the change of 4.52% was affected by the metropolitan areas of Curitiba, with increase of 23.83%, reflecting the price adjustment of 24.86% granted on July 22 and covering the period from June 24 on; São Paulo, with 11.79% as a result of the readjustment of 18.00% in fares starting on July 04; Recife, with 3.94% as a result of the price adjustment of 35.00% in the value of Contribution for Public Lighting Costs - COSIP, in effect since June 13; Porto Alegre, with change of 2.55% due to the price adjustment of 23.00% in the fares of a company since June 19.

Also in the group Housing, there was decrease of 1.34% in water and sewage fares , despite the hike in the metropolitan area of Fortaleza (5.23%), the price adjustment of which (6.00%) went into effect on July 1st; and Salvador (1.96%), where the price adjustment of 7.80% has been in effect since June 06. The fall of 1.34% in the average change of this item was affected by the metropolitan area of São Paulo, where water and sewage fares became 9.11% cheaper. This result considered the effect of the Program of Incentive to Reduction of Water Consumption, approved through deliberation no. 469 by ARSEP, of Feb, 03, 2014 and extended through deliberation no. 480 by ARSEP, of March 31, 2014. The objective of this program, while it is in effect, is to give 30% bonuses on water and sewage fees to users who manage to reduce monthly consumption by 20%.

Also in the group Housing, the item manpower for small repair changed by 0.27%. Due to the lack of information from the Monthly Employment Survey (PME) for Salvador and Porto Alegre with reference to the month of May, these two areas had their caculation methodology adapted the same way as the item domestic workers. The other areas followed the regular procedures described in the technical note 02/2007, with estimations two months ahead considering the income of May collected through PME.

In Household articles , which also accelerated from June to July, there was influence of household appliances , with rise of 1.83% (0.97% in June) and furniture (from 0.47% to 0.74%). The group Health and personal care (from 0.60% in June to 0.50% in July) recorded increase but was below the previous month, whereas Education (from 0.02% to 0.04%) remained relatively at the same level.

The indexes of eight of the thirteen areas surveyed had a negative result in July. The highest result was that of Curitiba (0.50%), due to the rise of electricity (23.83%), given the readjustment of 24.86% authorized on July 22 and covering the period from June 24 on. The lowest index was that of Salvador (-0.61%), where electricity recorded decrease of 9.69%, reflecting, this way, the 83.49% decrease in the PIS/PASEP/COFINS rate. Fuel prices (6.00%) also contributed to the lowest result of the (-6.00%) Salvador.

IPCA has been calculated by IBGE since 1980. It refers to families with monthly income of one to forty minimum wages, whatever the source. It encompasses ten metropolitan areas in the country, besides the municipalities of Goiânia and Campo Grande. In order to measure the index of the month the prices collected from June 28 to July 28, 2014 (reference) were compared with the ones in effect from May 29 to June 27, 2014 (base)..

INPC changes 0.13% in July

The National Consumer Price Index (INPC) - INPC recorded change of 0.13% in July, being lower than the result of 0.26% in June by 0.13 percentage points. As a consequence, change in the year reached 3.92%, being above the rate of 3.17% relative to the same period of 2013. Considering the last twelve months, the index was 6.33%, being below that of the previous twelve months. In July 2013 had been -0.13%.

Food products recorded decrease of 0.23% in July, whereas non-food products recorded increase of 0.29%. In June, the results were -0.14% and 0.44%, respectively.

Among the regional indexes, the highest one was that of Curitiba (1.00%), due to the rise of electricity (23.85%), given the readjustment of 24.86% granted on July 22 and covering the period from June 24 on. The lowest index was that of Salvador (-0,28%), where electricity recorded decrease of 9.40%, reflecting, this way, the 83.49% decrease in the PIS/PASEP/COFINS rate. Fuelprices (-6.58%) also contributed to the lowest result of the Salvador index.

INPC has been calculated by IBGE since 1979. It refers to families with monthly income of one to five minimum wages, whatever the source. It encompasses ten metropolitan areas in the country, besides the municipalities of Goiânia and Campo Grande. In order to measure the index of the month the prices collected from June 28 to July 28, 2014 (reference) were compared with the ones in effect from May 29 to June 27, 2014 (base)..