The U.S. Consumer Price Index (CPI) showed no real change in July, suggesting that inflation eased as a result of falling gasoline prices, according to the latest data from the Bureau of Labor Statistics released on Wednesday.
Overall, the CPI, which tracks gasoline prices, fell 7.7 percent, while other indexes, including food, posted gains. Used vehicles and airline tickets fell along with gasoline.
This may mean we have already experienced peak inflation, with inflation slowing as a direct result of falling gas prices.
Consumer prices rose 8.5% in July on a year-over-year basis, but down from the 9.1% year-on-year increase recorded in June. June’s figures represented a forty-year high.
Wells Fargo forecast that US inflation could fall to 5% in the next few months due to the sharp drop in energy prices.
“We would not be surprised to see headline 12-month consumer price inflation take a sudden, large decline, perhaps from 9.1% in June to 5% or 6% over the next two or three months,” the investment institute’s team at the bank said in a note to clients on Monday, as reported by MSN.
Gasoline prices in the United States have fallen for 57 straight days, reaching a national average of $4,010 a gallon on Wednesday, according to AAA. A month ago, the average price per gallon was $4,684. On Tuesday at locations tracked by GasBuddy, the average price per gallon was $3.99.
The CPI numbers follow a promising jobs report last week.
President Joe Biden on Wednesday said the zero rise in inflation from June to July “underscores the kind of economy we’re building.” Speaking at the White House, Biden said there were “some signs” that inflation was starting to “moderate.”
By Charles Kennedy for Oilprice.com
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