US Inflation Rate Slows to 2.9%

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Facts

  • The US Labor Department on Wednesday reported that the consumer price index (CPI), a broad-based measure of prices for goods and services, increased by 0.2% for July, putting the 12-month inflation rate at 2.9% — the lowest it's been since April 2021.[1]
  • The core CPI registered a 0.2% monthly increase and 3.2% annual rate when food and energy were excluded.[1]
  • This marks the fifth straight month that inflation — once as high as 9% in the aftermath of the COVID pandemic — has cooled. But consumer prices remain approximately 20% higher than they were three years ago.[2]
  • There are hopes this data will inspire the Federal Reserve to cut interest rates at its Sept. 17-18 meeting. The Fed, which has been targeting a 2% inflation rate before issuing a rate decrease — has kept borrowing costs at 5.3%.[3]
  • Stocks reacted well to this news, with the Dow Jones up more than 200 points after midday Wednesday.[4]

Sources: [1]CNBC, [2]ABC News, [3]New York Times and [4]Business Insider.

Narratives

  • Democratic narrative, as provided by New York Times. Democratic policies to relieve American families from the burden of inflation are working, but not everything will be fixed overnight. There's still a lot of work to do to bring relief to all Americans and there are several actions, including cracking down on corporate price gouging, that can be taken in order to completely vanquish inflation.
  • Republican narrative, as provided by FOX News. The Biden-Harris administration, and Democrats across the country, may want to pass this modest news off as some sort of victory, but the American people are still losing. The cost of goods and services has increased by more than 5% since Biden took office, and very little has been done to relieve the pressure on consumers.

Predictions