US Inflation rate dips to 8.5 per cent in the past year, down from 40-year high

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The inflation rate in the United States for the past 12 months took a slight dip from its 40-year high for the month of July, rising by only 8.5 per cent, according to the Bureau of Labor Statistics.

The latest Consumer Price Index summary showed that the monthly CPI for All Urban Consumers did not change after it increased 1.3 per cent in June.

The index for gasoline, which was previously the biggest driver for inflation, dropped 7.7 per cent, while the energy index fell 4.6 per cent as the index for electricity increased.

The drop in gasoline prices offset the fact that the index for food increased 1.1 per cent in the past month, which makes July the seventh consecutive month where it increased by 0.9 per cent or more. Overall, the index for food increased 10.9 per cent in the past 12 months.

The index for food at home jumped by 1.3 per cent, as the index for cereals and bakery products increased 2.0 per cent for the past month and 15 per cent in the past year; meat, poultry fish and eggs increased by 0.6 per cent in the past month and 10.9 per cent in the past year; dairy products increased by 1.7 per cent in the last month and 14.9 per cent in the past year; fruits and vegetables increased 0.4 per cent and 9.3 per cent in the 12 months; non-alcoholic beverages and beverage materials increased by 2.0 per cent in the last month and 13.8 per cent in the last year; and other food at home increased by 2.1 per cent in the last month and 15.8 per cent in the last 12 months.

The slight dip in inflation comes as the Federal Reserve announced it would raise interest rates last month. Chairman Jerome Powell announced a 0.75 percentage point interest last month to stave off rising prices.

In addition, Senate Democrats over the weekend passed their signature climate and health care bill called the Inflation Reduction Act of 2022. The House is set to vote on it on Friday.