Inflation “eased,” news headlines declared following the July consumer price index report. But that may not yet be evident to most Americans. Compared to July of last year, prices rose 8.5%, a slower pace than the 9.1% inflation rate in June. Still, most Americans, particularly those with lower incomes, continue to struggle with the brutal effects of increasing prices. (These are the places where the most people need food stamps in every state.)
Several important everyday items continue to surge in price. Although the spike in gas and oil prices has started to moderate, the prices of most items in these categories still rose by over a third. The price of one household item continued its surge — fuel oil prices soared over 75%. Food prices, too, continued to pressure the cost of living higher. One example is the price of eggs, which was up 38%.
Whether experts believe inflation is easing or not, the drag on the economy will, at least for now, persist. The prices of everyday essential goods and services are rising faster than wages, and discretionary income continues to be eroded. (These are 10 things Americans need to fear about inflation.)
One of the largest open questions about inflation is how it can be tamed. The Federal Reserve continues to raise rates at a pace not seen in over a decade. Many critics think the pace is not fast enough.
Frequent Fed observer, former Treasury Secretary Larry Summers and Harvard president recently commented he is certain inflation will cause a recession. He said ahead of the July CPI report, “Soft landings represent a kind of triumph of hope over experience.” “Soft landing” meaning economic growth slows, rather than go into recession, and inflation declines.
Finally, lurking in the offing, is the situation regarding oil prices. While they have recently dropped sharply, the geopolitical situation with Russia’s invasion of Ukraine and conflict or tension in parts of the Middle East offer no guarantee that the move down will not reverse itself.
To determine the 30 household items that are soaring in price, 24/7 Wall St. reviewed the BLS’ Consumer Price Index Summary July report. Prices are compared to July 2021.
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