For the first time in four years, the rate of inflation has shown a decrease, according to just-released figures from the Bureau of Labor Statistics.
The new data shows a decline of 0.1% in June over the month before. While that number may seem insignificant, it represents the only recorded decline since May of 2020, during the initial weeks of the Covid 19 pandemic.
Shortly after the May 2020 numbers – showing the rate at 0.2% – inflation began its wild ride, with an impact felt across the country, jumping to 5% in September of that year and an imposing 9% in June of 2022.
While inflation’s numbers have been on a general decline since the summer of 2022, dropping to 3% in June of 2023, the figures have stayed stubbornly in the 3.7% to 3.0% range since late last summer.
In announcing the latest figures, the Bureau of Labor Statistics noted that its Consumer Price Index showed a marginal increase in June for energy and food items, as well as increases in “shelter, motor vehicle insurance, household furnishings and operations, medical care, and personal care.”
But the indexes for “airline fares, used cars and trucks, and communications, were among those that decreased over the month.”
These new figures from the BLS, notes the Wall Street Journal, “clears a path for the Federal Reserve to cut interest rates by the end of the summer.”
The publication Baron’s had the same take: “Slower-than-expected inflation in June should help cement hopes that Federal Reserve officials will have the conviction they need to begin lowering interest rates.”
For his part, U.S. Federal Reserve Chairman Jerome Powell remarked: “Our undertaking is to make decisions when and as they need to be made, based on the data, the incoming data, the evolving outlook and the balance of risks, and not in consideration of other factors, and that would include political factors.”
Speaking before a hearing of the House Financial Services Committee, Powell added: “Anything we do will be well grounded.”
By Garry Boulard
Image Credit: Courtesy of Unsplash
