Annual Inflation Rate Falls Below 3% for First Time Since 2021
Summary from the AllSides News Team
In July, the annual inflation rate dropped below 3% for the first time since 2021, while the Consumer Price Index (CPI) rose just 0.2% on a monthly basis, which was in line with economic predictions.
Key Details: This marks the fourth month of disinflation, which some framed as good news for the economy and for Vice President Kamala Harris.
For Context: This report is the latest sign that inflation's steep rise may be over and may pave the way for the Federal Reserve to lower interest rates.
Key Quote: “We still expect the Federal Reserve to cut interest rates by up to a half a percentage point at their September 17-18 meeting,” wrote Paul Christopher, head of global investment strategy at Wells Fargo Investment Institute, in a note ahead of the inflation announcement.
How the Media Covered it: Washington Examiner (Lean Right bias) noted that a lackluster July employment report showed a softening labor market and that lowering interest rates could be bad for the economy if the inflation rate does not continue to move down. The Washington Post (Lean Left bias) noted officials at the Federal Reserve had said they won't lower interest rates until they're confident that inflation was cooling to normal levels.
Featured Coverage of this Story
From the Right
Inflation falls for fourth month in a row, now at 2.9%
In some good news for Vice President Kamala Harris and the economy, annual inflation fell to 2.9% in July — now marking four months of disinflation.
The one-tenth of a percentage point decline in the consumer price index comes as most economists expected that annual inflation would remain at 3%, the same as the month before.
Notably, inflation is now the lowest it has been since March 2021, shortly after President Joe Biden was sworn in.
On a month-to-month basis, inflation rose 0.2%.
Inflation is the biggest concern facing voters, so the White House and Harris campaign are undoubtedly breathing a...
From the Left
Inflation eased slightly in July, likely keeping Fed on track to cut rates
Inflation eased slightly on an annual basis in July, as Federal Reserve officials inch closer to interest rate cuts that will take some pressure off the economy.
Data from the Bureau of Labor Statistics released Wednesday showed prices rose 2.9 percent year over year, a slight improvement on the figure notched in June. Prices also rose 0.2 over the previous month.
The report will probably move central bankers closer to cutting interest rates at their next policy meeting in September. For months, Fed officials have said they won’t trim borrowing costs until they’re confident...
From the Center
Consumer prices rose 0.2% in July, in line with expectations
Inflation rose as expected in July, driven by higher housing-related costs, according to a Labor Department report Wednesday that is likely to keep an interest rate cut on the table in September.
The consumer price index, a broad-based measure of prices for goods and services, increased 0.2% for the month, putting the 12-month inflation rate at 2.9%. Economists surveyed by Dow Jones had been looking for respective readings of 0.2% and 3%.
Excluding food and energy, core CPI came in at a 0.2% monthly increase and a 3.2% annual rate,...
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