US inflation remains stable in July and accumulates 8.5% rise in 12 months

THE inflation us United States remained stable in the 12-month period ended in July 2022, with 8.5% in the 12-month period, according to data from the Consumer Price Index (CPI) released this Wednesday (10).

In comparison with June, the indicator did not change. The value was lower than expected by the market, which projected a monthly high of 0.2%, with an accumulated increase of 8.7%. In the previous month, the CPI rose 1.3%, accumulating 9.1% in 12 months, the highest value in 41 years.

The core CPI, which excludes volatile items such as food and energy, rose 0.3% in the monthly comparison, accumulating a high of 5.9% in 12 months.

The July result is linked to a sharp drop in the cost of gasoline, providing the first sign of relief for Americans, who have seen inflation soar in the past two years to its highest in decades.

In a report, the Labor Department indicated that underlying inflationary pressures remain high.

Inflation in the country has been pushed up by both a supply shock that raises prices mainly for commodities, as well as the Petroleum as well as a heated demand, with a job market close to full employment.

The inflationary scenario started with the pandemic and was worsened by war in ukraine .

At the same time, the Federal Reserve , the US central bank, started a cycle of interest rate hikes in March to fight inflation. With four hikes, interest rose from the range of 0% to 0.25% to 2.25% to 2.5% per year.

The CPI is not the Fed’s reference to monitor the inflationary situation in the United States, but it is considered an antecedent of the official data, the Personal Consumption Expenditure Index (PCE).

Therefore, after the weaker-than-expected inflation data, the market reinforced its bets on a less aggressive interest rate cycle in the coming months, with an increase of 0.5 percentage point in September, and not 0.75 pp as designed a few days ago .

*With information from Reuters