Inflationary Pressures Ease in July
The Federal Reserve’s efforts to combat inflation by raising interest rates have finally impacted rising prices in the U.S. However, while inflation is at a three-month low, it remains near 40-year highs. The Consumer Price Index (CPI) for All Urban Consumers, a measure of price changes commonly referred to as the inflation rate, was up 8.5% on an annual basis in July 2022, according to the Bureau of Labor Statistics. That was lower than the 8.7% increase economists were expecting and it was down from the 9.1% annual increase in June, which was the biggest year-over-year jump in prices since November 1981. Inflation has now remained at or near 40-year highs for nine consecutive months, the biggest price surges since the severe economic recession of 1981-1982. The most recent increase in inflation was broad-based, with rising prices in energy and food being the largest contributors. Energy prices were up 32.9% in the year-ending July, with gasoline prices climbing 44%, but both of those measures were down from the previous month. The cost of shelter rose 5.7% over the past year, the largest 12-month increase since February 1991. Food prices continued to edge higher, climbing 10.9% on an annual basis, the largest 12-month increase since the year-ending May 1979. The price of new cars and trucks was up 10.4% in the year-ending July, though that was down from the June showing of 11.4%. Additionally, the cost of airline fares was up 27.7% year-over-year in July but down from the 34.1% hike in June.