US inflation is slowing faster than expected. That is according to data from the US Department of Labor on Wednesday.
On an annual basis, inflation rose by 8.5 percent in July. That’s less than the 9.1 percent recorded in June – the most significant increase in four decades.
Compared to June, consumer prices remained unchanged in July. However, falling fuel and energy prices compensated for price increases for food and housing. As a result, food prices rose by 10.9 percent year-on-year. It is the biggest jump since 1979.
Core US inflation – excluding volatile food and energy prices – stood at 5.9 percent yoy in July and 0.3 percent in June. Analysts at Bloomberg news agency had expected total inflation of 8.7 percent and 0.2 percent on an annual and monthly basis. They had estimated core inflation at 6.1 and 0.5 percent, respectively.
Due to high inflation, the US central bank has raised interest rates four times since March, successively by 25, 50, and twice 75 basis points. However, with consumer prices rising slower than expected, that may ease pressure on the Federal Reserve to continue its aggressive policy.