After reaching its highest rate in four decades in June, inflation in USA it was placed at 8.5% in July, 6 tenths less, and thus gave a break to the world’s main economy, which continues its struggle to continue containing prices.
According to data published this Wednesday by the Bureau of Labor Statistics (BLS)the year-on-year drop comes after consumer prices have remained stable (0%) this month, thanks mainly to the drop in gasoline prices, which was 7.7% in July.
The drop in the inflation rate gives a small respite to the american economywhich at the end of July entered into what experts consider a technical recession by chaining two quarters of falls in gross domestic product (GDP).
A diagnosis that, however, does not share the Government that presides over Joe Bidenwho does not believe that the country is in a recession scenario given the robustness of its economy, especially its labor market, with an unemployment rate of 3.5%.
Biden today celebrated the drop in the inflation rate, although he warned that the Executive’s work to contain prices “is far from over.”
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The president also called on Congress to “immediately” approve the Inflation Reduction Law, which was approved by the Senate on Sunday and now has to go through the process of the House of Representatives.
The BLS noted that as a whole, energy prices fell 4.6% last month. And, while gasoline and gas (3.6%) fell, the price of electricity increased 1.6%.In the last 12 months, energy prices have increased 32.9%, with a rise interannual of gasoline of 44%.
Faced with the drop in energy prices, food prices continued to rise, 1.1% in one month. This was the seventh consecutive monthly increase above 0.9%.
In year-on-year terms, food prices have risen 10.9% in the last 12 months. Eating at home has become 13.1% more expensive, while eating away from home is 7.6% more expensive than a year ago. Core inflation, which measures the rise in consumer prices excluding those of food and energy -the most volatile- stood at a year-on-year rate of 5.9%, with a monthly rise of 0.3.
The year-on-year rise in transport of 9.2% stands out, although this month prices fell by half a point.
The prices of new vehicles continued to rise, by 0.6%, and accumulate an annual increase of 10.4%. High inflation remains the main concern
tion of the Biden Executive, when there are three months to go before the mid-term elections.
In his assessment of the inflation data, the president acknowledged today that with the “global challenges” facing the country due to the war in Europe, the interruption of supply chains and the closures due to the pandemic in Asia, “strong winds” may arrive. against additional in the coming months.
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As White House economic adviser Cecilia Rouse told Efe, there are other events that could impact prices such as “the hurricane season, which can affect refineries and energy prices.”
In addition, he explained that food prices have not yet begun to moderate because they are greatly affected by Russia’s war against Ukraine since “basic products are traded in a global market.”
High prices are also the main concern of the Federal Reserve, which raised interest rates again on July 27, which are now in a range of between 2.25% and 2.5%.
In the opinion of the economist at the Atlantic Council think tank, Charles Lichfield, “inflation is slowing down due to lower gasoline prices, not to the adjustment policy of the Federal Reserve,” he told Efe.
“This is good news, as it can increase consumer confidence,” said this expert, who however warned that with continued supply chain problems and tight labor markets, “inflation will not fall as fast, and this may not protect us from a recession.”
