Falling gas prices gave Americans a slight break from the pain of high inflation last month, though overall price increases slowed only modestly from the four-decade high that was reached in June.
FILE - A motorist fills up the tank on a sedan, on July 22, 2022, in Saratoga, Wyo. Falling gas prices gave Americans a slight break from the pain of high inflation last month, though the surge in overall prices slowed only modestly from the four-decade high it reached in June.WASHINGTON —
Those declines lowered so-called core inflation, a measure that excludes the volatile food and energy categories to provide a clearer picture of underlying inflation. Core prices rose just 0.3% from June, the smallest month-to-month increase since April. And compared with a year ago, core inflation amounted to 5.9% in July, the same year-over-year increase as in June.
Still, core prices have slowed in the recent past only to re-accelerate in subsequent months. And plenty of items are continuing to grow more expensive. Food prices kept surging in July, for example, and have risen 13% from a year ago, the largest such increase since 1979. The costs of rent, medical care and furniture also rose at elevated rates.
Yet Republicans are stressing the persistence of high inflation as a top issue in the midterm congressional elections, with polls showing that elevated prices have driven Biden’s approval ratings down sharply. A blockbuster jobs report for July that the government issued Friday — with 528,000 jobs added, rising wages and an unemployment rate that matched a half-century low of 3.5% — solidified expectations that the Fed will announce yet another three-quarter-point hike when it next meets in September. Robust hiring tends to fuel inflation because it gives Americans more collective spending power.
Supply chain snarls are also loosening, with fewer ships moored off Southern California ports and shipping costs declining. Prices for commodities like corn, wheat and copper have fallen steeply.
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