Inflation Falls Below 3%, Lowest Since 2021
Dipping inflation strengthens hopes for Fed Rates cut next month
In a positive milestone for the U.S. economy, annual inflation rates have dropped below 3% for the first time since March 2021, a Bureau of Labor Statistics report says. This fall in inflation also precedes a much-anticipated announcement by the Fed that they will be cutting interest rates at next month's meeting—a move that was hoped for in July but did not materialize, with rates remaining unchanged since July 2023, the last time they were lowered.
According to the Bureau of Labor Statistice In July, the food index rose by 0.2%, mirroring June’s increase. The food at home index slightly increased by 0.1%, with mixed results across grocery categories: meats, poultry, fish, and eggs surged by 0.7%, driven by a 5.5% spike in egg prices, while the fruits and vegetables index rose by 0.8%. However, the indexes for other food at home, cereals, and bakery products all fell by 0.5%. Food away from home saw a 0.2% rise, with limited-service meals increasing by 0.3% and full-service meals by 0.1%.
Over the past year, the food at home index increased by 1.1%, with significant gains in the meats, poultry, fish, and eggs index (+3.0%). In contrast, fruits and vegetables, as well as dairy and related products, saw slight declines. The food away from home index increased by 4.1%, driven by a 4.3% rise in limited-service meals and a 3.8% increase in full-service meals.
