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Sunday, October 2, 2022

Inflation in the US Drops Marginally in July to 8.5%

Following a 1.3% increase in June, the Consumer Price Index (CPI) remained constant in July

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Ishita Chakraborty
Ishita Chakraborty
Editor-in-Chief at Transcontinental Times, Computer Science Graduate, PG diploma in Journalism and Mass communication. Ishita is a youth activist for PETA India, President of Girlup IWO, and a linguaphile. She covers social issues, politics, UN initiatives, sports, and diversity.

UNITED STATES: After U.S. inflation data revealed that monthly consumer price growth increased at a slower pace than predicted, dampening expectations of an aggressive rate hike by the Federal Reserve in September, U.S. stock index futures gained strongly today while European markets surged.

Due to a substantial decline in gasoline costs, U.S. consumer prices did not increase in July. This is the first significant sign of comfort for Americans who had watched inflation soar over the last two years.

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Following a 1.3% increase in June, the Consumer Price Index (CPI) remained constant in July, according to carefully awaited data released by the Labor Department on Wednesday.

Despite this, the report showed that underlying inflation pressures are still high as the Federal Reserve considers whether to adopt another significant interest rate hike in September.

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Following an approximately 20% decrease in the price of gasoline, economists had anticipated a 0.2% increase in the monthly CPI in July.

According to motorist advocacy group AAA, prices at the pump increased in the first half of this year as a result of the conflict in Ukraine, reaching a record-high average of more than $5 per gallon in mid-June.

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However, the Fed has stated that a number of consecutive months of CPI growth falls will be required before it can halt its increasingly aggressive tightening of monetary policy to combat inflation, which is presently running at four-decade highs.

Due to many circumstances, such as congested global supply chains, a significant government stimulus early in the COVID-19 epidemic, and Russia’s invasion of Ukraine, U.S. consumer prices have been rising.

Food is one component of the CPI that remained elevated in July, rising 1.1% last month after climbing 1.0% in June.

After rising by 9.1% in June, the CPI grew by a less-than-expected 8.5% over the year ending in July. Positive trends were also seen in the underlying inflation pressures, which do not include the volatile food and energy components.

The so-called core CPI increased by 0.3% in July after rising by 0.7% in June, but at the same rate of 5.9% over the preceding 12 months as in June.

Inflation in the cost of rent and owners’ equivalent rent of primary residence, which is what a homeowner would receive from renting a home, held almost steady last month. Shelter costs comprise about 40% of the core CPI measure.

Also Read: RBA Is Set To Increase Cash Rate Target By 50 Basis Points To 1.85% As Inflation Expected To Peak

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  • Ishita Chakraborty

    Editor-in-Chief at Transcontinental Times, Computer Science Graduate, PG diploma in Journalism and Mass communication. Ishita is a youth activist for PETA India, President of Girlup IWO, and a linguaphile. She covers social issues, politics, UN initiatives, sports, and diversity.

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