US inflation eases in July amid falling oil prices

WASHINGTON, Aug 10 (AFP): US inflation eased slightly in July, according to official data Wednesday, potentially taking pressure off the Federal Reserve to hike interest rates sharply while bringing a much-needed boost to President Joe Biden just months before crucial midterm elections.
With energy costs dropping in recent weeks, the consumer price index dipped to an annual rate of 8.5 percent last month, the Labor Department reported, lower than markets were projecting.
Fueled by aggressive consumer spending of pandemic savings, global supply chain snarls, domestic worker shortages and Russia's war on Ukraine, inflation soared 9.1 percent on-year in June, the highest in 40 years.
But the CPI was unchanged compared to June, a dramatic shift from the big increase in the prior month and defying expectations of a modest rise. "Today we received news that our economy had zero percent inflation in the month of July. Zero percent," Biden said at a White House event.
"We are seeing signs that inflation may be beginning to moderate," he said, although he acknowledged that the global challenges remain and the economy could face "additional headwinds."
When volatile food and energy prices are excluded from the calculation, the so-called core CPI rate rose just 0.3 percent -- the smallest in four months, according to the report.
Soaring prices have continued to climb in the United States, squeezing family budgets and, by extension, Biden's popularity.
Biden's opponents accuse the president of precipitating inflation with a gigantic $1.9 trillion coronavirus relief package, enacted in March last year shortly after assuming office.
And Republicans renewed their criticism of Biden's economic policy, warning that Sunday's passage in the Senate of his massive climate and health care bill titled the "Inflation Reduction Act," would do the opposite of its stated purpose.
But the president said his economic policies are working.
In addition to cooling inflation "jobs are booming" and wages are rising "That's what happens when you build an economy from the bottom up from the middle out," he said
"Our work is far from over... (but) the economic plan is working."