The Globe and Mail reports in its Thursday edition that United States consumer prices rose slightly in July, largely due to a drop in gasoline prices, while underlying inflation remained low, cutting the chances of a Federal Reserve rate hike next month. A Reuters dispatch to The Globe reports that the recent rebound in the Consumer Price Index, reported by the Labor Department, met economists' expectations, showing slight increases in food and apparel prices while hotel and prescription costs fell. This follows unexpected job losses in July, but economists still suggest a potential rate increase this year as inflation exceeds the 2-per-cent target set by the U.S. central bank. Morgan Stanley's Ellen Zentner says: "In-line inflation will keep the 'no need to hike rates' narrative that took hold after last week's jobs report intact. There will be another round of inflation data before the September meeting, so the story line could still change." The CPI edged up 0.1 per cent last month after dropping 0.4 per cent in June, which was the first decline in six years, the Labor Department's Bureau of Labor Statistics said. A 0.1-per-cent rise in the cost of shelter accounted for roughly two-thirds of the gain in the CPI.