After the highest peak of the last 40 years, inflation in the United States has declined but is still high: in July it hit 8.5%.

After hitting a record 9.1% in June, the highest figure in the last 40 years, inflation in the United States records a slight decline in July and stands at 8.5%, still a high grade but this is a brief respite for Joe Biden’s government.

According to analysts, the reason for the drop is the sustained drop in fuel prices, which was 7.7% in July. The general price index from June to July remained the same, the first time in nearly two years.

Overall, energy prices fell 4.6% from last month. However, while the price of petrol and gas has gone down, the price of electricity has gone up.

Faced with falling energy prices, food prices continued to rise, by 1.1% in one month. Core inflation, which measures the rise in consumer prices minus those of food and energy – the most volatile – stood at an interannual rate of 5.9%with a monthly increase of 0.3.

For Biden, the drop in gasoline prices is a sign that his policies, including oil released from the country’s strategic reserve, are managing to reduce the high costs which have strained the finances of Americans, especially those with the lowest incomes.

However, prices are skyrocketing on a wide range of goods and services, leaving most Americans in worse shape.

Median wages are rising at a rate not seen in decades, but not enough to keep pace with accelerating prices for food, rent, cars and medical services.

However, Republicans insist persistence of high inflation as a major problem in mid-term legislative elections, and polls show that high prices have made drastically lower approval ratings by Biden.

A controversial recession

The fall in the rate of inflation gives a small respite to the US economy, which at the end of July entered what experts consider a technical recession, chaining two quarters of decline in Gross Domestic Product (GDP).

A diagnosis that, however, the US government does not share given the solidity of its economy, in particular of its labor market, with a unemployment rate of 3.5%.

In any case, high inflation continues to be the main concern of the government and also of the Federal Reserve, which on July 27 again raised interest rates, which are now between 2.25% and 2.5%. .

Source: AP