Slight decline in inflation in August in the United States
Inflation remained above 8% in the United States last August due in particular to high food prices.
Inflation slowed again in August in the United States, thanks to the fall in gasoline prices, but remains very high due in particular to soaring food prices, a thorn in the Joe Biden's foot two months from the midterm elections.
Inflation fell to 8.3% year on year in August, from 8.5% in July, according to the Consumer Price Index (CPI) published on Tuesday by the Department of Labor, which refers to and is used to, in particular, index pensions.
However, the slowdown is less severe than expected by analysts, who saw inflation settling at 8%.
And over one month, prices rose again, to +0.1% compared to July, against zero inflation between June and July, and while analysts expected a fall, to -0.1%.
Compared to July, gasoline prices fall by 10.6%. Those of food, on the other hand, increased by 0.8% over one month, and even by 11.4% over one year, the strongest increase since 1979.
This new slowdown eases some pressure for Joe Biden two months before the crucial midterm elections. The Republican opposition regularly criticizes him for having, through his policy, largely contributed to this inflationary outbreak.
The US President will hold a ceremony at the White House on Tuesday afternoon in honor of his Inflation Reduction Act, the plan to fight climate change, which he managed to push through Congress in August .
The text must fight climate change and help households cope with medium-term inflation, with financial incentives aimed at changing the climate. economy towards renewable energies, a limit on the price of certain drugs and the creation of a minimum tax rate on large companies.
For a year and a half, prices have been soaring, eroding household purchasing power. Inflation hit its highest level in more than 40 years in June, before slowing in July.
Inflation is far too high and it is essential reduce it, Treasury Secretary Janet Yellen hammered on CNN on Sunday, acknowledging that there is a risk of recession, due to the actions taken by the American central bank (Fed) to slow the economy and thus containing inflation.
But we have a strong labor market, and I believe it is possible to maintain it, and, in the longer term, we cannot have a strong labor market without inflation under control, added the minister of Economics and Finance by Joe Biden.
The Fed has warned that it will continue to raise its key rates sharply. This pushes commercial banks to offer more expensive loans to their individual and business customers, who are less inclined to consume and invest, which should help ease the pressure on prices.
Time is running out, warned Thursday its president, Jerome Powell.
Another Fed official, Governor Christopher Waller, indicated on Friday that it is still too early to say that inflation is slowing in a significant and lasting way. .
The Fed favors another measure of inflation, the PCE index, which also slowed in July (+6.3% year on year), and bring it back around the 2% considered healthy for the economy. x27; saving will take time. But recession fears which he said have faded, along with the strength of the labor market, give the Fed the flexibility to be aggressive.
The job market remains very tight with a shortage of workers. The unemployment rate, however, rose a little in August, to 3.7%.
It is unlikely, however, but not impossible, that the Fed will achieve the soft landing it hopes for, i.e. to curb inflation by only slightly increasing unemployment, say economists Laurence Ball of Johns Hopkins University, and Daniel Leigh and Prachi Mishra of the IMF, in a paper published last Wednesday by the Brookings Institution.
They say the Fed will likely have to push unemployment well above its 4.1% projection.