2024-08-14 13:06:24
In the US, inflation unexpectedly weakened in July. Consumer prices rose by 2.9 percent compared to the same month last year, as the US Department of Labor announced Wednesday in Washington. The inflation rate is the lowest since March 2021. In the previous month the rate was 3.0 percent. Economists are, on average, expecting the rate to remain unchanged.
Compared to the previous month, prices rose by 0.2 percent. This is what economists have predicted.
The core index excluding energy and food fell to 3.2 percent in July from 3.3 percent in the previous month. This is also what economists expect. As expected, core consumer prices rose by 0.2 percent compared to the previous month. The core rate is given specific attention by the US Federal Reserve Bank. According to experts, it reflects the general price trend better than the average rate.
Overall inflation is driven by house prices, says Dirk Chlench from LBBW. These contributed 90 percent to the increase in the consumer price index in July. The super core rate, the monthly rate calculated without the food, energy and housing price groups, was 0.0 percent, as in the previous month. “The door remains open for a Fed rate cut at the September meeting.”
The Fed is moving to ease its monetary policy. On financial markets, the interest rate cut in September is considered a foregone conclusion. “The current developments on the macroeconomic financial front in North America are unlikely to stand in the way of cautious interest rate cuts by the central bank in Washington,” said Tobias Basse from NordLB “Following the new data we received as part of the consumer survey conducted by the New York Fed short-term inflation expectations in the United States have recently fallen below the ‘magic’ mark of three percent.
An interest rate increase greater than 0.50 percentage points will no longer be mandated. The Fed aims for inflation of two percent. In addition to slowing inflation, weak labor market and economic data also speak in favor of a slowdown. The US Federal Reserve has indicated an interest rate cut, but has made this dependent on data developments. Concerns about the US economy have led to market turmoil for some time.
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