Aug 15, 2024 07:57 AM IST
Data from US Labor Department showed that consumer prices rose just 0.2% from June to July after dropping slightly the previous month.
US’ year-over-year inflation reached its lowest level in over three years in July which could make Federal Reserve cut interest rate in September. Data from US Labor Department showed that consumer prices rose just 0.2% from June to July after dropping slightly the previous month. Compared to last year, prices rose 2.9%, down from 3% in June which was the mildest gain since March 2021.
Higher rental prices and other housing costs, as per real-time data, is easing. Inflation is steadily falling closer to the Fed’s 2% target which might suggest that the economy is weakening, Tara Sinclair, an economist at George Washington University and a former Treasury Department official, said.
Tara Sinclair said, “It’s a comforting report, both because it is going in the right direction and because it is not doing anything too dramatic. It is exactly what we wanted to see.”
What US Labor department data shows on the country’s economy?
1. In July, grocery prices rose just 0.1% and are a scant 1.1% higher than they were a year earlier.
2. Food prices remain 21% above where they were three years ago.
3. Gas prices were unchanged from June to July and have actually fallen 2.2% in the past year.
4. Clothing prices also dropped last month and are nearly unchanged from 12 months earlier.
5. New and used car prices fell in July, too. Used car prices have tumbled nearly 11% in the past year.
6. Some food prices, including for meat, fish and eggs, are still increasing faster than before the pandemic. Dairy and fruit and vegetable prices fell in July.
When will US Fed cut interest rates?
Fed Chair Jerome Powell said earlier that he is seeking additional evidence of slowing inflation before the Fed begins cutting its key interest rate. Economists widely expect the Fed’s first rate cut to occur in mid-September which is likely to be followed by additional cuts in November and December.