Filed Under: Business

Consumer prices stay flat in July, annual inflation cools to 8.5%

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Inflation decelerated in July to 8.5% year over year following June’s peak of 9.1%, according to the Bureau of Labor Statistics report out Wednesday. A dip in energy prices helped cool the consumer price index, which has hovered at four-decade highs all year.

Overall consumer prices were flat for the month of July from June, down from June’s monthly jump of 1.3%. Gas prices were down 7.7% in July after reaching record highs in June. Gas is still up 44% year over year. Meanwhile, food rose 1.1% for the month, up 10.9% on the year.

Core consumer prices, which exclude more volatile food and energy, rose 5.9% on the year, or just 0.3% on the month. Used vehicles and apparel ticked down, while new cars increased by 0.6% month to month.

Housing rose 0.5% from June, up 5.7 percent year over year. Rent rose 0.7 percent in July.

The latest inflation numbers follow a stronger-than-expected jobs report released Friday, which has economists worried inflation could persist later in 2022, prompting the Federal Reserve to continue aggressively hiking interest rates. U.S. employers added 528,000 jobs in July, far exceeding expectations and dropping the unemployment rate to 3.5%, matching the 50-year low last seen in February 2020.

The Fed has twice raised the benchmark interest rate by a jumbo 75 basis points, making the overnight borrowing rate 2.25-2.5%, up from the 0.0-0.25% range it was in March. The governing body’s next meeting is in September.

Meanwhile, the U.S. economy has registered two consecutive quarters of negative growth, at odds with the labor market and prompting debate over whether the country is in recession.

Simone Del Rosario: CONSUMER PRICES FLATTENED IN JULY, THE FIRST TIME WE HAVEN’T SEEN A MONTHLY PRICE INCREASE IN MORE THAN TWO YEARS.
DOWN FROM JUNE’S RED HOT READING OF 9.1%.
THE HEADLINE NUMBER WAS DRAGGED DOWN BY SLUMPING ENERGY PRICES.
THE ENERGY INDEX, DOWN 4.6% ON THE MONTH, DRIVEN LARGELY BY GAS DECLINES,
DOWN 7.7% ON THE MONTH, BUT STILL UP 44% ON THE YEAR.
WHERE AMERICANS DIDN’T SEE RELIEF, IS MOST EVERYWHERE ELSE.
FOOD PRICES CONTINUE TO CLIMB, RISING 1.1% THE MONTH OF JULY, OR 10.9% ON THE YEAR.
THE SHELTER INDEX IS ALSO UP.
CORE INFLATION – WHICH EXCLUDES FOOD AND ENERGY…THAT’S WHAT THE FEDERAL RESERVE LOOKS AT THE MOST –
THAT HELD STEADY AT 5.9%, THE SAME ANNUAL RATE WE SAW IN JUNE, WHILE CORE PRICES PICKED UP 0.3% ON THE MONTH.
WHILE ANNUAL INFLATION TECHNICALLY COOLED, 8.5% IS STILL ONE OF THE HOTTEST READINGS IN 40 YEARS.
COUPLED WITH JULY’S STRONGER THAN EXPECTED JOBS REPORT, WHICH BROUGHT UNEMPLOYMENT TO A 50-YEAR LOW…AND REAL WAGES CONTINUING TO INCREASE, UP HALF A PERCENT ON THE MONTH, ECONOMISTS BELIEVE THIS COULD LEAD TO INFLATION PERSISTING AT HIGH LEVELS – LEADING THE FEDERAL RESERVE TO CONTINUE AGGRESSIVE RATE HIKES AT ITS NEXT MEETING IN SEPTEMBER.

I’M SIMONE DEL ROSARIO IN NEW YORK AND IT’S JUST BUSINESS

Inflation decelerated in July to 8.5% year over year following June’s peak of 9.1%, according to the Bureau of Labor Statistics report out Wednesday. A dip in energy prices helped cool the consumer price index, which has hovered at four-decade highs all year.

Overall consumer prices were flat for the month of July from June, down from June’s monthly jump of 1.3%. Gas prices were down 7.7% in July after reaching record highs in June. Gas is still up 44% year over year. Meanwhile, food rose 1.1% for the month, up 10.9% on the year.

Core consumer prices, which exclude more volatile food and energy, rose 5.9% on the year, or just 0.3% on the month. Used vehicles and apparel ticked down, while new cars increased by 0.6% month to month.

Housing rose 0.5% from June, up 5.7 percent year over year. Rent rose 0.7 percent in July.

The latest inflation numbers follow a stronger-than-expected jobs report released Friday, which has economists worried inflation could persist later in 2022, prompting the Federal Reserve to continue aggressively hiking interest rates. U.S. employers added 528,000 jobs in July, far exceeding expectations and dropping the unemployment rate to 3.5%, matching the 50-year low last seen in February 2020.

The Fed has twice raised the benchmark interest rate by a jumbo 75 basis points, making the overnight borrowing rate 2.25-2.5%, up from the 0.0-0.25% range it was in March. The governing body’s next meeting is in September.

Meanwhile, the U.S. economy has registered two consecutive quarters of negative growth, at odds with the labor market and prompting debate over whether the country is in recession.

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