US inflation is slowing down, revealing the most disappointing aspect.

On August 14th, the US Department of Labor released a report showing that consumer prices in the country had risen again in July 2024, but inflation was still trending downwards.

Another positive sign for the US fight against inflation. (Source: AP)

Specifically, the US consumer price index (CPI) rose 0.2% in July, after falling 0.1% in June. Compared to the same period last year, as of July 2024, the CPI had increased 2.9%, following a 3.0% increase in June.

Excluding volatile food and energy components, the core CPI rose 0.2% in July, following a 0.1% increase in June.

Compared to the same period last year, as of July, the core CPI had increased by 3.2%, the lowest increase since April 2021, following a 3.3% increase in June.

According to chief economist Jeffrey Roach at financial brokerage LPL Financial, investors and policymakers alike see the Labor Department report as a positive signal for the market and the economy, allowing the Federal Reserve to cut interest rates while maintaining a generally accommodative monetary policy.

The most disappointing part of the Labor Department's report was the housing price drop, which economists and policymakers had expected to bring inflation closer to the Fed's target.

Housing prices, the largest component of the services sector, rose 0.4% in July, after falling 0.2% in June.

However, other categories fared better for consumers. Clothing, new and used cars, and airline tickets all fell, while healthcare services saw their sharpest decline in history.

Consumer price inflation has fallen significantly from its peak of 9.1% in June 2022 and is moving toward the US central bank's 2% target.

With inflation on a downward trend, coupled with a weakening job market, the Fed is strongly expected to begin cutting interest rates next month, while the extent of the cuts will likely be determined by upcoming data releases.

Ahead of its September meeting, the Fed will receive further data on the personal consumption expenditures (PCE) index and the jobs report, issues that will be scrutinized closely after disappointing July figures contributed to a global market sell-off and fueled recession fears.

The Fed's interest rate cut at its September 17-18 policy meeting is currently projected to be either 50 basis points or 25 basis points.

Source: https://baoquocte.vn/lam-phat-my-dang-dan-cham-lai-he-mo-phan-dang-that-vong-nhat-282619.html