Inflation Fell Below 3% in July For the First Time Since 2021

Washington, DC, August 14, 2024-The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.2 percent on a seasonally adjusted basis, after declining 0.1% in June, the U.S. Bureau of Labor Statistics reported. This is better than anticipated. Over the last 12 months, the all items index increased 2.9% before seasonal adjustment.

The index for shelter rose 0.4% in July, accounting for nearly 90% of the monthly increase

in the all-items index. The energy index was unchanged over the month, after declining in the two preceding months. The index for food increased 0.2% in July, as it did in June. The food away from home index rose 0.2% over the month, and the food at home index increased 0.1%. 

The index for all items less food and energy rose 0.2% in July, after rising 0.1% the

preceding month. Indexes which increased in July include shelter, motor vehicle insurance, household furnishings and operations, education, recreation, and personal care. The indexes for used cars and trucks, medical care, airline fares, and apparel were among those that decreased over the month.

The all-items index rose 2.9% for the 12 months ending July, the smallest 12-month increase since March 2021. The all-items less food and energy index rose 3.2% over the last 12 months and was the smallest 12-month increase in that index since April 2021. The energy index increased 1.1% for the 12 months ending July. The food index increased 2.2% over the last year.

“U.S. inflation edged lower in July, extending a run of encouraging readings following a rocky stretch at the start of the year,” reports the Wall Street Journal.

“The consumer-price index rose 2.9% from a year earlier, the Labor Department said Wednesday. Core prices, which exclude volatile food and energy items, climbed 3.2% over the previous 12 months and 0.2% since June.

“The report likely seals the case for the Federal Reserve to begin cutting interest rates at its next meeting, Sept. 17-18. The Fed’s favored inflation gauge, which is released later each month, has been running closer to the central bank’s 2% target, and Fed Chair Jerome Powell has already signaled that a rate cut is probable in September.

“Wednesday’s report marks the first time that the CPI has edged firmly below 3% since early 2021.”