Washing machines are displayed at Sam's Appliances TV & Furniture, on March 25, 2021, in Norwood, Mass.
“Core prices are moving in the right direction,” said Rubeela Farooqi, chief U.S. economist for High Frequency Economics. “That will be welcome news to policymakers.”Thursday’s price data will be among the key barometers the central bank will weigh in deciding whether to continue raising interest rates. In its drive to tame inflation, the Fed has raised its benchmark rate 11 times since March 2022 to a 22-year high.
Energy costs rose just 0.1%. Modestly higher gasoline prices were offset by falling electricity prices. Economists say that in the Fed’s fight to conquer inflation, the easy progress has likely already been achieved. Gasoline prices, for example, though liable to bounce around from month to month, have already plunged from a peak national average of more than $5 a gallon, which was reached in June of last year after Russia’s invasion of Ukraine.
Another factor working against continued declines in year-over-year inflation rates is that prices soared in the first half of last year before slowing in the second half. So any price increase in July would have the effect of boosting the year-over-year inflation rate. Likewise, Richard Priedits of Grand Rapids, Michigan, said he’s noticed higher costs during his annual vacation out West.