Inflation eased last month as energy prices tumbled, raising hopes that the surging costs of everything from gasoline to food may have peaked.
According to a Commerce Department report this morning that is closely watched by the Federal Reserve, consumer prices rose 6.3% in July from a year earlier after posting an annual increase of 6.8% in June, the biggest jump since 1982. Energy prices made the difference in July: They dropped last month after surging in June.
So-called core inflation, which excludes volatile food and energy prices, rose 4.6% last month from a year earlier after rising 4.8% in June. The drop—along with a reduction in the Labor Department’s consumer price index last month—suggests that inflationary pressures may be easing.
On a monthly basis, consumer prices actually fell 0.1% from June to July; core inflation blipped up 0.1%, the Commerce Department reported.
Inflation started rising sharply in spring 2021 as the economy rebounded with surprising speed from the short but devastating coronavirus recession a year earlier. Surging customer orders overwhelmed factories, ports and freight yards, leading to delays, shortages and higher prices. Inflation is a worldwide problem, especially after the Russian invasion of Ukraine drove up global food and energy prices. Read the full story.
