BUSINESS: U.S. inflation eases in July as gasoline prices fall

U.S. ener­gy prices con­tin­ued to surge last month, but low­er gas prices mod­er­at­ed the pace.

Annu­al infla­tion, the rate of increase in prices, hit 8.5% in July, low­er than June’s spike to 9.1%, accord­ing to the Labor Department.

Oth­er than ener­gy, costs con­tin­ued to rise in many items such as food and housing.

Ris­ing costs are hurt­ing many fam­i­lies and hav­ing a huge impact on the economy.

Job growth remains strong, but oth­er indi­ca­tors, such as con­sumer con­fi­dence and busi­ness sen­ti­ment, are being weighed down by fears of infla­tion, which is ris­ing at the fastest pace since the ear­ly 1980s.

Over the past 12 months, U.S. food prices rose 13.1%, the largest annu­al rate of increase since 1979. Ris­ing cof­fee prices con­tributed to high­er food costs in July, ris­ing 3.5% in June alone.

Hous­ing, med­ical and leisure prices also rose from June, but were off­set by declines in items such as used cars, air­fare and clothing.

Gaso­line prices are down 7.7% from June’s all-time high, aver­ag­ing more than $5 a gallon.

Over­all, the results were bet­ter than many ana­lysts expected.

“We’re still far from the deep drop in infla­tion that [the US cen­tral bank] is look­ing for. Paul Ash­worth, chief econ­o­mist at Cap­i­tal Eco­nom­ics, said:

“But this is the begin­ning, and it’s a start, and we’re going to see a rise in prices over the next few months.” “We expect to see broad­er signs of eas­ing upward pressure.”

In the Unit­ed States, prices have sky­rock­et­ed since last year due to a vari­ety of fac­tors, includ­ing strong con­sumer demand fueled by the gov­ern­men­t’s Covid-19 checks.

On the oth­er hand, due to prob­lems such as the sus­pen­sion of oper­a­tions due to the pan­dem­ic in Chi­na and the war in Ukraine, sup­plies are tight, includ­ing sta­ple foods such as oil and wheat.

As food prices rise, Aquin­nah Rank says it is buy­ing cheap­er ver­sions of store-brand­ed items such as cere­als and buy­ing less of non-essen­tial items such as biscuits.

Low­er gas prices have pro­vid­ed some relief, but the 21-year-old Mass­a­chu­setts stu­dent who works in restau­rants this sum­mer won­ders if he’ll find a job that will help him cov­er rapid­ly ris­ing food and rent costs when he grad­u­ates from col­lege in May. It seems that the wor­ry is irresistible.

“I’m wor­ried about wages not going up.