US inflation hits 2% target

US consumer inflation increased in July, hitting the Federal Reserve's 2% target rate and keeping it on track to taper bond purchases as early as next month.

The figure rose from 1.8%, with housing, food and clothing all contributing to the increase. Elsewhere, US jobless claims also fell to a six-year low last week, which has eased the Fed's concerns inflation has remained too low. The jobless number dropped by 15,000 to 320,000, and by 0.2% to 7.4% for the week ended 10 August, the lowest it has been since October 2007. In June, chairman Ben Bernanke said the Fed planned to keep the short-term interest rate at a record low until the jobless rate fell below 6.5%, provided inflation remained under control.