The US Consumer Price Index (CPI) data for the July month was released on Wednesday (August 14) and reported a notable slowdown in inflation, with the CPI slumbing to 2.9 per cent on a yearly basis. This also posts the lowest annual inflation rate since March 2021, down from 3 per cent in June.
Monthly CPI Increase
On monthly basis, the CPI surged by 0.2 per cent in July, recovering from a 0.1 per cent decline in June.
The major factors driven to this surge include the index for shelter, which jumped 0.4 per cent and also contributed nearly 90 per cent to the monthly rise.
US inflation growth slows to sub 3% , lowest price rise since March 2021
US July CPI inflation rate falls to 2.9%, below expectations of 3.0%.
Core CPI inflation fell to 3.2%, in-line with expectations of 3.2%.
September rate cut coming .
— Ajay Bagga (@Ajay_Bagga) August 14, 2024
This also points out that the housing costs plays a major role in influencing the overall prices levels.
Core CPI Data
Meanwhile excluding volatile categories such as food and energy, the core CPI also saw a 0.2 per cent surge in July.
The US Inflation Rate (CPI) has moved down from a peak of 9.1% two years ago to 2.9% today.
What’s driving that decline?
Lower rates of inflation in Used Cars, Gasoline, New Cars, Fuel Oil, Apparel, Food at Home, Gas Utilities, Medical Care, Food away from Home, Electricity,… pic.twitter.com/1l7ZpmTknd
— Charlie Bilello (@charliebilello) August 14, 2024
The annual core CPI rate, which strips out these unpredictable items, slowed slightly to 3.2 per cent from 3.3 per cent in June.
US Market Reactions
The latest CPI figures have also stirred discussions about potential Federal Reserve actions. The modest increase in consumer prices could pave the way for the Fed to consider rate cuts in September.
For consumers, the cooling inflation rate brings a mix of relief and uncertainty. While the lower CPI suggests that price increases are slowing, ongoing concerns about employment and economic stability mean that the road ahead may still be bumpy.
The U.S. stock market on Wednesday trading on a mixed note as the S&P 500 gained by 0.92 per cent, reaching the session at 5,435.35 points. The Nasdaq dropped by 0.12 per cent to 17,178.97 points, and the Dow Jones Industrial Average declined by 0.03 percent to 39,754.97 points.
Food Inflation Eases As Rates Decline From 8.04% To 3.68%
For consumers, the cooling inflation rate brings a mix of relief and uncertainty. While the lower CPI suggests that price increases are slowing, ongoing concerns about employment and economic stability mean that the road ahead may still be bumpy.
