Consumer prices rose 2.7 percent in the 12 months to July 2011, primarily the result of higher prices for gasoline and food. This follows a 3.1 percent increase in June and a 3.7 percent advance in May. Energy prices advanced 12.9 percent during the 12 months to July, following a 15.7 percent increase in June. On a year-over-year basis, gasoline prices rose 23.5 percent, compared with the 28.5 percent gain in June. In contrast, natural gas prices fell. Food prices rose 4.3 percent in the 12 months to July, matching the increase in June. Excluding food and energy, the Consumer Price Index (CPI) increased 1.2 percent in the 12 months to July, after advancing 1.4 percent in June.
Did the inflation rate increase, decrease, or remain the same in July 2011? In your answer, distinguish between the CPI and the core CPI. Why might the core CPI be a useful measurement and why might it be misleading?