Americans may finally be taking a breather from the relentless rise in prices, however slight, even as inflation is expected to remain painfully high for months.
Thanks in large part to falling gasoline prices, the government’s inflation report for July, due Wednesday morning, is expected to show prices rose 8.7% from a year earlier; still a breakneck pace but a 9.1% year-over-year slowdown. figure in June, which was the highest in four decades.
The economists’ forecast, if correct, would raise hopes that inflation may have peaked and that the run of higher prices is starting to taper off slightly. There have also been other hopeful signs that the pace of inflation may be moderating.
At the same time, a series of other economic developments threaten to further intensify inflationary pressures. The pace of hiring is robust and median salaries have risen sharply. And even as gas prices fall, inflation in services like health care, rent and restaurant meals is accelerating. Price changes in services tend to be sticky and don’t decline as quickly as they do for gasoline, food, or other goods. Those trends suggest that headline inflation may not fall significantly any time soon.
President Joe Biden has already pointed to falling gasoline prices as a sign that his policies, such as releasing oil from the nation’s strategic reserve, are helping combat higher costs that have strained family budgets. , particularly for low-income families.
However, Republicans will push current high inflation as a major campaign issue in this fall’s election, and polls show high prices have slashed Biden’s approval ratings.
On Friday, the House of Representatives is set to give final congressional approval to a revived tax and climate package pushed by Biden and Democratic lawmakers. The bill, which among other things aims to lower pharmaceutical prices by allowing the government to negotiate Medicare drug costs, is expected to reduce the federal budget deficit by $300 billion over a decade.
However, economists say the measure, which its proponents have dubbed the Inflation Reduction Act, will have only a minimal effect on inflation in coming years, though it could curb price increases a bit more later this decade. .
[Con información de The Associated Press]
Connect with the Voice of America! Subscribe to our channel Youtube and turn on notifications, or follow us on social media: Facebook, Twitter and Instagram.
Add Comment