An inflation measure closely tracked by the Federal Reserve remained low last month, the Associated Press reports, extending a trend of cooling price increases that clears the way for the Fed to start cutting its key interest rate next month for the first time in four and a half years.
Prices rose just 0.2% from June–July, the Commerce Department said today, up a tick from the previous month’s 0.1% increase. Compared with a year earlier, inflation was unchanged at 2.5%.
Excluding volatile food and energy costs, so-called “core” inflation rose 0.2% from June–July, the same as in the previous month. Measured from a year earlier, core prices increased 2.6%, also unchanged from the previous year. Economists closely watch core prices, which typically provide a better read of future inflation trends.
Today’s figures underscore that inflation is steadily fading in the United States after three painful years of surging prices hammered many families’ finances. According to the measure reported this morning, inflation peaked at 7.1% in June 2022, the highest in four decades.
Despite the near-end of high inflation, many Americans remain unhappy with today’s sharply higher average prices for such necessities as gas, food, and housing compared with their pre-pandemic levels.
