Inflation holds firm and slows less than expected in August in US – 09/14/2022 at 00:19

Joe Biden at the White House throughout a speech about his funding plan, the Inflation Reduction Act, September 13, 2022 (AFP/Mandel NGAN)

U.S. inflation slowed barely in August, pushed by a fall in gasoline costs, whereas hire or meals costs rose, a thorn in Joe Biden’s facet in the 2-month midterm elections.

Consumer costs rose 8.3% yr over yr, up from 8.5% in July, in response to the CPI index launched Tuesday by the Labor Department. However, the slowdown dissatisfied analysts, who minimize inflation to eight%.

On Tuesday afternoon, when Wall Street ended its session in the crimson as a consequence of these figures, a whole lot of individuals gathered at the White House to have fun a textual content not too long ago adopted by Joe Biden, and known as the “Inflation Reduction Act” or “Inflation Reduction Act”. ”

The Evolution of Inflation in the United States Since 1948 (AFP/)

The Evolution of Inflation in the United States Since 1948 (AFP/)

The 79-yr-previous Democrat, carrying shirt sleeves and sun shades on his nostril, shouted: “With this regulation, the American folks have received, and the lobbies have misplaced!”

The “Inflation Reduction Act”, so named to stay in the information however which is definitely a program of environmental and social reforms, “will make an enormous distinction for center and working class households”, he assured.

Joe Biden additionally emphasised, weeks earlier than legislative elections in November, the truth that no Republican opposition lawmakers supported the textual content, which guarantees, for instance, to cut back the exorbitant prices of some frequent medicine like insulin.

– “Stubbornly Persistent” Inflation –

“Inflation stays stubbornly excessive,” Cathy Bostjancic, chief economist at Oxford Economics, commented in a be aware.

Because over a month, costs began to rise once more, +0.1% in comparison with July, the place a slight lower was expected and inflation was zero between June and July.


A “Beat Inflation” commercial for the 99 cents retailer-solely fare on the Los Angeles (Calif.) subway at the Redondo Beach (Calif.) station on August 31, 2022 (AFP / Patrick T. Fallon)

Filling up at service stations will definitely price a lot less than in July (-10.1%). A welcome respite in a rustic the place the automotive is commonly as important as it’s heavy, and when gasoline costs have soared for the reason that begin of the struggle in Ukraine.

Airline tickets and used automotive costs additionally fell.

But it wasn’t sufficient to offset progress in most different merchandise. Housing, meals, medical care, new vehicles … will increase are “generalized,” the Labor Department detailed in its press launch.

The costs of pure gasoline and electrical energy additionally proceed to rise.

“Ah. Much greater than expected (costs) rise throughout classes,” Ian Shepherdson, an economist at Pantheon Macroeconomics, mentioned in a be aware.

So-called core inflation, calculated on all costs besides meals and power costs, thus accelerated to +6.3% over the yr (in opposition to +5.9% in July), and +0.6% over the month (in opposition to +0.3% in July). )

For a yr and a half, costs in the US have been rising, decreasing family buying energy. Inflation reached its highest degree in extra than 40 years in June earlier than slowing in July.

– “Suddenly do” –

The figures despatched the greenback, the “protected haven”, hovering in opposition to different main currencies on Tuesday, as they have to persuade the US central financial institution (Fed) to tighten its grip on inflation-combating ways. financial coverage.

In particular phrases, it’s slowly elevating its prime charge, which is pushing banks to lift rates of interest on loans to people and companies. They then are inclined to decrease consumption and funding, which in flip reduces strain on costs.

The Fed, at the tip of its subsequent assembly on Sept. 21, may elevate charges by three-quarters of a % as they did in June and July. It has not beforehand resorted to such progress since 1994.

“Time is working out,” President Jerome Powell warned Thursday.

This deliberate slowdown in financial exercise, nonetheless, poses a danger of recession, and in any case, ought to push unemployment, which had already risen barely in August, to three.7%.

The job market, nonetheless, stays in glorious well being and faces labor shortages, giving the Fed some leeway.

The CPI index is used to index pensions. The Fed, which goals to carry inflation again to round 2%, favored one other measure, the PCE index, whose progress slowed in July (+6.3% on a yr).


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