CPI July Report: Inflation Is Slowly Decreasing, Prices Remain High

Inflation has been steadily decreasing, but more efforts are needed to further reduce the cost of living for Americans in the coming months. 

According to the July Consumer Price Index (CPI-U) report released Aug. 14, which measures the price of consumer goods and services purchased by American households, in July, the index for all items excluding food and energy increased by 0.2%, up from a 0.1% rise the previous month. Key areas that saw price increases included shelter, motor vehicle insurance, household furnishings, education, recreation, and personal care while prices for used cars, medical care, airline fares, and apparel fell.

Over the past year, the overall index rose by 2.9%, the smallest 12-month increase since March 2021. The core index, excluding food and energy, decreased to 3.2%, the lowest increase since April 2021. Energy prices grew by 1.1% and food prices by 2.2% over the same period. Expensive housing costs drove up the CPI drastically, rising by 0.4% and accounting for most of the monthly change. Energy prices remained stable, following previous declines, while food prices saw a 0.2% increase, consistent with June’s rise, according to the report.

While this cooling inflation may offer some relief to consumers who have faced rising prices in recent years, experts suggest that it may not be sufficient to significantly ease high costs for essentials like housing and food.

“If inflation goes down, it means that the rate at which prices increase is slowing down, but it generally is not going to mean that prices are going down,” William Hauk, an associate professor in the Department of Economics at the University of South Carolina, told CNBC.

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Black households have been feeling the weight of inflation over the last two years.

A 2022 NPR/Robert Wood Johnson Foundation/Harvard T.H. Chan School of Public Health poll found significant disparities in financial hardship between Black and white Americans.

Black adults were more likely than white adults to report serious financial problems, including insufficient emergency savings and difficulties affording food, when inflation soared in 2022, the highest level seen since 1981, according to Investopedia. It peaked at 9.1% mid-year in the wake of the COVID-19 pandemic.

Specifically, 55% of Black Americans reported serious financial issues compared to 38% of white Americans, and 58% of Black adults lacked enough emergency savings versus 36% of whites. Additionally, 16% of Black renters faced eviction or threats of eviction that year compared to 9% of white renters. The poll, conducted from May 16 to June 13, 2022, surveyed over 4,000 U.S. adults and highlighted financial challenges across different racial and ethnic groups.

How have you been weathering the storm of inflation?

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