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- The rate of inflation was slower than expected in July, offering some hope that inflation is cooling down. Inflation dropped 0.6% from its June peak, for a year-over-year rate of 8.5%, according to Labor Department data published Wednesday.
www.cnbc.com › 2022/08/10 › inflation-rate-drops-in-july-but-cpi-prices-remain-high
Aug 14, 2024 · T he annual inflation rate has cooled, new data from the U.S. Bureau of Labor Statistics revealed on Wednesday. The July consumer-price index shows an annual inflation rate of 2.9%, slightly...
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Aug 8, 2023 · On Thursday, when the government will issue inflation data for July, economists expect it to show a slight pickup in year-over-year inflation to 3.3%. It would be the first such increase after 12 months of declines. In part, any rebound in annual inflation for July will reflect higher gas prices.
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Aug 10, 2023 · The CPI report shows annual inflation rose slightly in July, interrupting a year-long streak of waning price hikes. Core price hikes stayed elevated.
- Overview
- Prices still running hot
Inflation slowed in July as gasoline prices dropped, a sign the Federal Reserve's efforts to control spiraling prices are taking effect.
Consumer prices last month rose 8.5% from the same month a year ago, the Labor Department reported on Wednesday — lower than economists had expected and down from 9.1% in June.
Core inflation, which strips out volatile food and gas numbers, rose 5.9% annually, the same rate as in June and slightly lower than analyst forecasts.
"Largely driven by falling gas prices, inflation dipped slightly in July to 8.5%, down from the 40-year high reported in June," Bright MLS chief economist Lisa Sturtevant said in an email.
"Other prices, including prices of online goods and airline fares, dropped in July and consumers report they expect lower inflation in the months ahead, which are all signs of a potential turnaround in the inflation picture," she said.
The figures give consumers hope that the hottest inflation in four decades is cooling, if only a little. Gas prices, for instance, have fallen from an average of $5 a gallon in June to $4 a gallon today.
While inflation seems to be easing, it remains painfully high for U.S. consumers. Prices for food and shelter continued to rise last month, although those increases were offset by falling energy costs.
Food prices increased at an annual rate of 10.9%, the fastest rise since 1979, the July CPI figures show. Prices for shelter, medical care, new vehicles, car insurance and recreation also rose last month, while costs for airline fares and used cars and trucks dropped.
Semiconductor shortages, which have kept prices of vehicles, electronics and appliances high, are finally easing, meaning that costs for these big-ticket items should continue to decline, noted Paul Ashworth, chief U.S. economist at Capital Economics.
The Federal Reserve is expected to continue raising its benchmark interest rate next month, with economists predicting a hike of half to three-quarters of a percentage point. The central bank has raised the federal funds rate four times this year in a move to slow the economy and arrest spiraling inflation.
"Overall, prices remain uncomfortably high. Coupled with strength in job growth and wages, the data support the case for another aggressive rate hike in September," Rubeela Farooqi, chief U.S. economist with High Frequency Economics, said in a report.
Financial markets are betting that the Fed will keep raising rates this year, to a range of 3.50% to 3.75%. The Fed's goal is to cool inflation without tipping the economy into recession — a difficult needle to thread.
Aug 10, 2022 · Aug. 10, 2022, 6:57 AM PDT. By Rob Wile. Inflation reached 8.5% in July, compared with a 40-year high of 9.1% in June, providing a measure of relief to consumers as gas prices drop. Economists...
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Aug 15, 2022 · The Consumer Price Index for All Urban Consumers was unchanged in July 2022 after rising 1.3 percent in June and 1.0 percent in May. Gasoline prices fell 7.7 percent in July and offset increases in food and shelter prices, resulting in the index for all items being unchanged in July.
Feb 13, 2024 · The Fed raised its key rate 11 times, from March 2022 to July of last year, in a concerted drive to defeat high inflation. The result has been much higher borrowing rates for businesses and consumers, including for mortgages and auto loans.
