Inflation fell by more than expected to 8.5% year over year.
In fact, driven by the rapid decline in gas prices, consumer prices actually fell marginally in the month of July:
The pace of price increases slowed in July as energy costs dropped, pulling annual U.S. inflation down slightly from a four-decade high.
The Labor Department on Wednesday said the consumer-price index, a measure of what consumers pay for goods and services, rose 8.5% in July from the same month a year ago, down from 9.1% in June. June marked the fastest pace of inflation since November 1981.
On a monthly basis, the CPI was flat in July after rising for 25 consecutive months, the result of falling energy prices such as gasoline. Core CPI, which excludes often volatile energy and food prices, eased to 0.3% last month, down sharply from June’s 0.7% gain.
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The average national price of a gallon of regular unleaded gasoline fell to $4.00 on Wednesday, more than $1 cheaper than in mid-June but still higher than a year ago, according to OPIS, an energy-data and analytics provider owned by Dow Jones & Co., publisher of The Wall Street Journal.
Food prices could moderate in coming months as supply improvements filter through to consumers, Mr. Bethune said. “For the things that really eat a hole in our pockets, gasoline and food, we’ve seen the turning point in gasoline and I think we’re on the cusp of some declines in food.”
Of course, this won't stop the Federal Reserve from raising rate, because they want to put an end to wage increases and increased unionization, because worker power is always the problem.
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