The latest inflation report just dropped

Drumroll, please… 🥁🥁🥁

The Consumer Price Index, the most widely used measure of US inflation, rose 8.5% in the year through July, according to official government figures released yesterday. That’s down from 9.1% for the twelve months preceding June.

And on a monthly basis, the CPI was unchanged in July after rising 1.3% the prior month, marking its largest monthly deceleration since 1973 (from +1.3% → 0%).

📉📈 Driving the numbers… energy prices, which saw a 4.6% overall decline in July compared to the previous month. That helped offset a 1.1% monthly increase in food – including the highest annual grocery inflation since 1979 (13.1%) – and a 0.5% increase in shelter costs.

• The price of gas at the pump has fallen for 57 straight days, and now costs 20% less than it did in mid-June ($4.01/gallon nationwide, per AAA).
• Used-car prices also dropped on a month-to-month basis, as did airline fares and apparel. July tends to be a big month for discounting, largely due to Amazon Prime Day and other sales-based holidays from its competitors.

👀 Looking ahead… The Fed’s policy-making committee, which has raised interest rates from near-zero to the 2.25%–2.50% range so far this year, will meet in early September to consider a further increase. The central bank’s long-term goal is for annual US inflation to be around 2%.

+In the know: Social Security recipients are on track to receive the highest cost-of-living increase in more than four decades next year, based on averaging monthly inflation readings in 2022.