Former IMF chief economist Kenneth Rogoff discusses the state of the economy following the July CPI report.
Inflation eased again in July, even as an uptick in the cost of rent, groceries and auto insurance kept prices uncomfortably high for millions of Americans.
The Labor Department on Wednesday said that the consumer price index, a broad measure of how much everyday goods like gasoline, groceries and rent cost, rose 0.2% in July from the previous month, in line with expectations.
Prices climbed 2.9% from the same time last year. It marked the lowest level of inflation since March 2021.
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“Evidence is piling up that consumers are struggling under the combined weight of high prices, elevated interest rates, and the cooling job market,” said Mark Hamrick, senior economic analyst at Bankrate. “Even with the ‘as expected’ readings, prices broadly continued to rise last month.”
Here is a breakdown of where Americans are seeing prices rising and falling the fastest.
Rent
Housing costs were once again the main driver of inflation last month. Rent costs rose 0.3% for the month and are up 5.1% from the same time last year.
Rising rents are concerning because higher housing costs most directly and acutely affect household budgets.
A house for sale in the Capitol Hill neighborhood of Washington, D.C., on July 30, 2024. (Photographer: Tierney L. Cross/Bloomberg via Getty Images / Getty Images)
Another data point that measures how much homeowners would pay in equivalent rent if they had not bought their home also climbed by 0.4% from the previous month.
Shelter inflation was a “fly in the ointment” in the July CPI report, said Kathy Bosjancic, Nationwide chief economist.
“These readings throw some cold water on the idea that rental inflation was finally slowing on a sustained basis after June’s soft reading,” she added.
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Food
Food has been one of the most visceral reminders of inflation for many Americans, who saw prices once again tick higher in July.
The cost of food climbed 0.2% last month and is up 2.2% from the same time last year. The food-away-from-home index rose by 0.2%, while the cost of groceries inched 0.1% higher.
Groceries cost 1.1% more than they did last year, and when compared with January 2021 – before the inflation crisis began – prices are up more than 21%.
Consumers continued to pay more for a number of basics, including cookies (1.5%), beef and veal (1.2%), ham (3.3%), chicken (0.1%), milk (1.9%), carbonated drinks (0.6%), coffee (1.7%), tomatoes (3.6%) and citrus fruits (1.6%).
Customers on line to buy food at a supermarket in Foster City, California, on July 11, 2024. (Photo by Li Jianguo/Xinhua via Getty Images / Getty Images)
Some prices fell last month, including for rice, bread, ice cream and fish and seafood.
“While inflation ticked down overall, some of the major pain points for consumer prices worsened,” said Robert Frick, corporate economist at the Navy Federal Credit Union.
Energy
Energy prices remained flat in July after falling the previous two months, easing some of the financial pressure that many families are enduring.
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Gas prices were also unchanged in July, and remain down 2.2% from the same time last year.
However, the price of propane, kerosene and firewood rose 1.9% in July, while fuel oil costs climbed 0.9%.
A customer gets gasoline at a Shell station in Miami, Florida, on May 15. (Joe Raedle/Getty Images / Getty Images)
Cars
There was some good news for Americans looking to buy a car in July.
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New car and truck prices fell again last month, dropping 0.2%. Prices are down 1% from the same time last year.
The cost of used vehicles – which were a major component of the inflation spike in 2022 – also fell in July, tumbling 2.3%. From a year ago, prices are down 10.9%.
Used cars are offered for sale at a dealership in Chicago on July 11, 2023. (Scott Olson/Getty Images / Getty Images)
But there is another growing problem for car owners: insurance costs. Auto insurance premiums jumped 1.2% in July; prices are up a stunning 18.6% from the same time last year.
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Travel and Transportation
Airline tickets fell again in July, dropping 1.6%.
Delta Air Lines Airbus A330 landing at Athens International Airport. (Nicolas Economou/NurPhoto via Getty Images / Getty Images)
The cost of tickets is down about 2.8% when compared with last year, according to the data.
