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Headline Inflation Slows…
Inflation fell to its slowest pace since early 2021 in June, the Department of Labor said on Wednesday.
The U.S. consumer price index rose by three percent compared with a year ago, the government said. Compared with a month earlier, the index was up by 0.2 percent.
Both the yearly and monthly figures were lower than expected. Wall Street analysts had forecast a 0.3 percent increase for the month and a 3.1 percent increase year-over-year.
This sets the stage for the Federal Reserve to raise interest rates by 25-basis points at the next meeting of the Federal Open Market Committee at the end of July.
The Biden administration will no doubt declare the latest headline numbers as a victory over inflation. While the decrease in the pace of price increases is a welcome development to many Americans, it is unlikely to be very reassuring to0 many household budgets. Compared with pre-Biden dollars, Americans now have experienced price increases of around 17 percent.
More troubling than either core or headline inflation, however, is the resistance of underlying inflation. Median CPI was unchanged at 0.4 percent for the month, the third consecutive month at that rate, according to the Federal Reserve Bank of Cleveland.
