Inflation In The US Slows In June, Spending Rises

(CTN News) – According to the US Bureau of Labor Statistics, annual inflation increased at its lowest atre in more than two years in June, with the underlying price pressures moderating, a trend that, if sustained, might lead the Federal Reserve closer to ending its fastest interest rate hike cycle since the 1980s.

As a result of the improved inflation environment, other data released on Friday indicated that wages grew at their slowest rate in two years in the second quarter, indicating that wages were growing more slowly than expected.

Inflation is receding, which has sparked cautious optimism that the economy will go through a “soft landing” in the near future rather than the recession most economists have been predicting for some time.

In a statement on Wednesday, the Federal Reserve announced that it would raise its policy rate by 25 basis points, which will put it within the 5.25%-5.50% range, a level not seen since the 2007 housing market crash, and which hasn’t consistently exceeded in about 22 years.

“The Fed needs to make even more progress, but the inflation rate is dropping, which at the margin reduces the possibility of a September rate hike,” said Conrad DeQuadros, senior economic advisor at Brean Capital in New York.

It was reported earlier in May by the Commerce Department that the price index for personal consumption expenditures (PCE) had increased 0.1% following a 0.2% increase last month, after having edged up by 0.1% in the previous month.

A decrease of 0.1% in the price of food has been seen over the past 12 months, while an Inflation increase of 0.6% has been seen in the price of energy. By the end of June, the Inflation PCE price index had advanced 3.0% in the past 12 months, marking the third consecutive increase in the index.

Consequently, this was the smallest annual gain since March 2021, and it came after a jump of 3.8% in May of this year.

SEE ALSO:

ComEd EV Rally Is An Annual Event Attended By Teens From Oswego