U.S. Inflation Update: What You Need to Know

In July, the U.S. consumer price index (CPI) rose by 3.2% from last year, with a monthly increase of 0.2%. This suggests a slight ease in inflation, though it remains higher than the Federal Reserve's preferred 2% target.

Excluding the unpredictable food and energy costs, the core CPI also went up by 0.2%, translating to a yearly increase of 4.7%. This is its lowest since October 2021.

The market reacted favorably, with Dow Jones futures climbing significantly. Experts believe this progress might lead the Federal Reserve to stop its recent interest rate hikes.

A major portion of the inflation was attributed to rising housing costs, while some sectors like used cars saw a price drop. Despite these declines, areas like housing still raise inflation concerns.

Wages have shown a positive trend, increasing 1.1% over the past year. However, with inflation above the 2% mark, the possibility of a rate cut soon seems slim.

Interest rates have been raised 11 times since March 2022, and future actions are a topic of debate among policymakers. Still, the current high rates are expected to persist.

The U.S. economy remains resilient, growing despite higher rates. There's increasing hope of avoiding a recession. However, consumers seem to be feeling the pinch, relying more on credit cards, with credit card debt surpassing $1 trillion recently.

In short, while inflation remains a concern, there are glimmers of positive economic indicators.