Cheaper gas likely slowed high US inflation for a 2nd month – InsuranceNewsNet

InsuranceNewsNet — Your Industry. One Source.™

Sign in
  • Subscribe
  • About
  • Advertise
  • Contact
Home Now reading Washington Wire
Topics
    • Life Insurance News
    • Annuity News
    • Health/Employee Benefits
    • Property and Casualty
    • Advisor News
    • Washington Wire
    • Regulation News
    • Sponsored Articles
    • Monthly Focus
  • INN Exclusives
  • NewsWires
  • Magazine
  • Webinars
  • Free Newsletters
Sign in or register to be an INNsider.
  • Exclusives
  • NewsWires
  • Magazine
  • Webinars
  • Free Newsletters
  • Insider Pro
  • About
  • Advertise
  • Editorial Staff
  • Contact
  • Newsletters

Get Social

  • Facebook
  • Twitter
  • LinkedIn
Newswires
Washington Wire RSS Get our newsletter
Order Prints
September 13, 2022 Washington Wire No comments
Share
Share
Tweet
Email

Cheaper gas likely slowed high US inflation for a 2nd month

Associated Press

WASHINGTON (AP) — A sign that the painful inflation of the past 18 months may be gradually easing could come Tuesday, when the government is expected to report that the acceleration in U.S. prices slowed in August compared with a year ago for a second straight month.

Economists have forecast that the report will show that prices jumped 8.1% from 12 months earlier, down from a four-decade high of 9.1% in June and 8.5% in July, according to data provider FactSet. Sharply lower gas prices are behind much of the decline, along with the costs of used cars, air fares and clothing.

On a monthly basis — the figures the Federal Reserve, the agency charged with fighting inflation, monitors most closely — consumer prices are predicted to have dropped 0.1% in August. It would be the first outright decline in month-over-month inflation since May 2020 and would follow a flat reading in July.

Related stories

  • Patent Issued for Data security across data residency restriction boundaries (USPTO 11552955): Kyndryl Inc.
  • Patent Issued for Complex composite tokens (USPTO 11553352): eBay Inc.

Inflation has escalated families' grocery bills, rents and utility costs, among many other expenses, inflicting hardships on households and deepening gloom about the economy despite strong job growth and historically low unemployment.

Yet the signs that inflation might have peaked could bolster Democrats' prospects in the midterm elections and may already have contributed to slightly higher public approval ratings for President Joe Biden. In his speeches, Biden has generally stopped referring to the impact of high prices on family budgets. He has instead highlighted his administration's recent legislative accomplishments, including a law enacted last month that's intended to reduce pharmaceutical prices and fight climate change.

Still, Republicans blame Biden's $1.9 trillion financial rescue package, passed in March 2021, for contributing to higher prices. The legislation provided a third stimulus check and enhanced unemployment benefits, boosting consumers' ability to spend.

Many mainstream economistsgenerally agree, though they also blame snarled supply chains, Russia's invasion of Ukraine and widespread shortages of items such as semiconductors for fueling inflation. In recent months, though, supply chain backups have eased considerably, and so have chip shortages. Oil prices have dropped to about $88 a barrel, down from a peak of $123 in March.

The average cost of a gallon of gas fell to $3.72 nationwide on Monday, down from just above $5 in mid-June. And many businesses are reporting signs that supply backlogs and inflation are beginning to fade.

Elaine Buckberg, chief economist at General Motors, said the pandemic disruptions to overseas production of semiconductors, which have reduced auto output, “have largely dissipated and we're in a much better position now.” Supply chain disruptions overall, she said, have improved about 80% from the worst days of the pandemic.

Grocery prices have been a particular sore spot for many families. Over the past year, prices of of meat, milk and fruits and vegetables have soared by double-digits. But executives at Kroger, the nation's largest grocery chain, said that falling prices for farm commodities like wheat and corn could slow cost increases for food this year.

“We would expect there to be some flattening out of inflation in the back half of the year,” Gary Millerchip, Kroger's chief financial officer, told investors last week.

Still, despite signs that inflation is easing, the Fed is expected to impose another substantial increase in its benchmark short-term interest rate when it meets next week. Most analysts expect the policymakers to announce a third straight three-quarter-point hike, to a range of 3% to 3.25%.

The Fed's rapid rate increases — the fastest since the early 1980s — typically lead to higher costs for mortgages, auto loans and business loans, with the goal of slowing growth and reducing inflation. The average 30-year mortgage rate jumped to nearly 5.9% last week, according to mortgage buyer Freddie Mac, the highest figure in nearly 14 years.

Chair Jerome Powell has said the Fed will need to see several months of low inflation readings that suggest price increases are falling back toward its 2% target before it might suspend its rate hikes.

The central bank also closely tracks prices that exclude the volatile food and energy categories. So-called “core” inflation has also fallen from its peak, though it is forecast to tick up to 6.1% in August compared with a year ago, from 5.9% in July. On a monthly basis, economists expect core prices rose 0.4% in August — double what the Fed would prefer — up from 0.3% in July.

Even if inflation has peaked, most economists don't expect it to fall back to the Fed's 2% target for at least two years, if not longer. Wages are still rising at a strong pace — before adjusting for inflation — which has elevated demand for apartments as more people move out on their own. A shortage of available houses has also forced more people to keep renting, thereby intensifying competition for apartments.

Rising rents and more expensive services, such as medical care, are also keeping inflation high.

Older

U.S. sent $1.3 billion in small business covid aid abroad, raising new fraud fears

Newer

Comment Request for Review of a Generic Information Collection: Customer Experience Feedback

Advisor News

  • For some, nothing to fear from taking RMDs, professor says
  • Half of investors plan to work after retirement
  • Cetera to acquire Securian’s retail wealth business
  • Study: Education level should drive decisions on Social Security, annuities
  • Former California energy company exec given 5 years in prison for $15M investment fraud
More Advisor News

Annuity News

  • Investors scrambling to lock in rates propel annuity sales to record highs
  • North American and Annexus launch new fixed index annuity
  • Producers stew as insurers slow to process life and annuity applications
  • Substitute teacher wins massive lottery drawing in North Carolina. ‘Too good to be true’
  • Brad Rhodes: An annuity product many have never heard of
More Annuity News

Health/Employee Benefits News

  • Nearly half of all gig workers have no access to health insurance
  • California offers health insurance for $10 a month. The deadline is days away
  • Amazon announces service to deliver medications to your door. Here’s how it works
  • COVID-19Another COVID ‘new normal’: more Californians dying at home
  • Seven sentenced in conspiracy to defraud federal health insurance programs
More Health/Employee Benefits News

Life Insurance News

  • Cetera to acquire Securian’s retail wealth business
  • What does Curtis 'Cousin Eddie' Smith know in Murdaugh case?
  • Alex Murdaugh's murder trial starts with cellphones, bullets
  • Prosecutors, defense argue guns, bad acts in Murdaugh trial
  • Lincoln Financial Group offers new, fully automated life product, WealthAccelerate
Sponsor
More Life Insurance News
The time is 04:03:23am test

- Presented By -

Top Read Stories

  • A Louisiana employer's health perks helped their workers lose weight. Here’s how.
  • US debt ceiling limit reached; Social Security, Medicare targeted
  • Former CEO of Texas beverage company sentenced to 10 years in prison for fraud
  • LETTER: FEMA flood insurance is all but worthless
  • Will ChatGPT, artificial intelligence replace financial professionals any time soon?
More Top Read Stories >

FEATURED OFFERS

Grow life insurance sales in 2023 with middle-market clients

Tap a new source for sales and referrals with Allianz Life Insurance Company of North America.

Don't Miss ICMG 2023

When the success of your business depends on making the right connections, ICMG is the place to be.

How to Write For InsuranceNewsNet

Find out how you can submit content for publishing on our website.
View Guidelines

Topics

  • Life Insurance News
  • Annuity News
  • Health/Employee Benefits
  • Property and Casualty
  • Advisor News
  • Washington Wire
  • Regulation News
  • Sponsored Articles
  • Monthly Focus

Top Sections

  • Life Insurance News
  • Annuity News
  • Health/Employee Benefits News
  • Property and Casualty News
  • AdvisorNews
  • Washington Wire
  • Insurance Webinars

Our Company

  • About
  • Editorial Staff
  • Magazine
  • Write for INN
  • Advertise
  • Contact

Sign up for our FREE e-Newsletter!

Get breaking news, exclusive stories, and money- making insights straight into your inbox.

select Newsletter Options
Facebook Linkedin Twitter
© 2023 InsuranceNewsNet.com, Inc. All rights reserved.
  • Terms & Conditions
  • Privacy Policy
  • AdvisorNews

Sign in with your Insider Pro Account

Not registered? Become an Insider Pro.