US markets saw a slight reprieve as the Consumer Price Index showed signs of inflation cooling. Figures showed that prices for everyday goods and services increased by 8.5% over the past year, slowing down from the previous month.
Economists expected the measure to climb 8.7% year-over-year. Plummeting gas prices powered much of the month's cooldown, with the national average price per gallon sliding to $4.19 from nearly $5. That put significant downward pressure on the index, which had been lifted earlier in the year by skyrocketing energy prices. Focusing on the report’s details, food prices swelled 1.1% month-over-month following a 1% jump in the preceding period, registering another strong gain – which will likely hit lower-income families who spend a bulk of their pay packet on purchasing basic necessities.
Why it matters
With it being widely confirmed that inflation in the US seems to be past its peak, inflationary pressures remained strong. High prices for food and rent still pose a significant challenge for President Biden. The jump in the food index put the 12-month increase to 10.9%, the fastest pace since May 1979.
