Inflation in the United States picked up slightly last month, the first rise after a year of continued decline. The consumer price index rose to 3.2% in July in the annualized value, when it had fallen to 3% in June.
If there is anything evidenced by this result, of which the Federal Reserve (Fed) takes good note, it is that the fight against rising prices still continues, although it has cooled dramatically due to the aggressive containment policy imposed by the bank central United States.
Fed Chairman Jerome Powell has already warned that, despite the surprisingly good 3% figure in June, the job is far from over and signaled the possibility of further rate hikes after the July meeting. This time the Reserve raised the price of money by a quarter of a point, after a pause that broke the dynamic of ten consecutive increases since March 2022.
Powell stated that the goal of 2% that is set was not yet in sight. The next meeting is scheduled for September. “We will go day by day”, he said regarding whether there would be more hikes in rates, which are at their highest point in 22 years to slow the rise in inflation.
Experts do not believe, however, that this increase in prices means a return to escalation and that long-term progress should be eroded. A year ago inflation was over 8%. This reflux is attributed to circumstantial factors, such as the increase in the price of plane tickets, hotels and the cost of energy. The stock market responded upwards to this data.
Prices accelerated by two-tenths of a point from one month to the next, as predicted on Wall Street, although forecasts pointed to an annualized rate of 3.3%. If the most volatile elements, such as food and energy, are excluded, so-called core inflation, an index closely watched by the Fed, also grew by two tenths in July. Its annualized value is 4.7%, also below the expected 4.8%. Experts stressed that steady monthly readings on underlying price pressures could dissuade the Federal Reserve from continuing to raise rates in the near term.
Much of the increase in prices was due to the cost of housing, with a rise of four tenths, up to an annualized 7.7%.
Food prices rose by 0.2%, and energy by 0.1%. Taming inflation made it easier for wages to rise 0.3% month-on-month, and that’s up 1.1% compared to July 2022, a percentage lower than inflation.
In the set of data it is clear that inflation has fallen from that alarming 9.1% in June of last year, but the goal of 2% of the Federal Reserve is moving away, as is the possibility of a lowering of rates. The experts had previously warned that there should be no speculation about the upswing in July.
