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Inflation eases in July, driven by falling energy prices
Paula Wolf//August 26, 2022
The U.S. Commerce Department reported Friday that inflation eased in July, raising hopes that it may have peaked – finally.
Helped by lower energy costs, the personal consumer expenditures index rose 6.3% in July from a year ago, down from a 6.8% jump recorded in June, which was the biggest increase since 1982.
Core inflation, which excludes volatile food and energy prices, climbed 4.6% last month from the year before, following a 4.8% rise in June.
On a monthly basis, consumer prices fell 0.1% from June to July and core inflation inched up 0.1%.
The news also comes on the heels of a reduction in the Labor Department’s consumer price index in July. Inflation began to accelerate in the spring of 2021 as the economy rebounded quickly from the coronavirus recession.
The Associated Press noted that the personal consumption expenditures index is less well known than the Labor Department’s consumer price index, but is preferred by the Federal Reserve as a gauge of inflationary pressures.
One of the reasons is the PCE attempts to measure how consumers are adjusting to inflation by purchasing cheaper store brands to save money.
The Commerce Department report also showed that Americans’ after-tax personal income rose 0.3% from June to July after adjusting for inflation.
Paula Wolf is a freelance writer
