2024-10-10 12:47:00
(Washington) Inflation, a major subject of the presidential campaign, continued to slow down in September in the United States, although a little less than expected, returning to 2.4% over one year compared to 2.5% in August. according to the CPI index released Thursday by the Labor Department.
Posted at 8:47 a.m.
Updated at 10:57 a.m.
Over one month, prices increased by 0.2%, remaining at the same pace as the previous two months, again slightly above expectations.
Over one year, analysts expected a 2.3% increase in consumer prices, according to the consensus published by MarketWatch, which also forecast inflation of only 0.1% over one month.
The question of inflation is a major subject of this American presidential campaign, less than a month before the vote scheduled for November 5, with a persistent gap in particular between economic data, indicating that the national economy is in good health , and the feelings of many voters, faced with a sharp rise in prices over the last three years.
“We continue to make progress, with inflation returning to its pre-pandemic level,” said US President Joe Biden’s economic advisor, Lael Brainard, quoted in a press release.
“Inflation is substantially higher than expected last month, double forecasts,” said Republican candidate Donald Trump, “the Fed lowered rates a little too quickly.”
Inflation had reached a peak of 9.1% year-on-year in June 2022, driven by the economic recovery after COVID-19 and the invasion in Ukraine, and not seen since the early 1980s.
“But if you look at the last three or four years, what you see is a lot of pressure on real incomes, which have seen a low growth rate. So the real question is what voters will focus on,” he added.
So-called core inflation, which does not take into account the prices of food and energy, considered to be more variable, reached 0.3% over one month, the same as in August. , and 3.3% over one year, slightly more than that observed a month earlier (3.2%).
Energy prices, on the other hand, continued to fall sharply, by 1.9% over one month, with even a 4.1% drop in prices at the pump.
Housing and food on the rise
On the other hand, home food prices increased by 0.4% over one month, after six months of almost total stability.
As for housing, another important item which has seen a marked increase over the last three years, prices are slowing down, with an increase of only 0.2% over one month.
The Department of Labor points out that housing and food constitute 75% of the price increase observed in September.
“If you take housing out of the equation, inflation has been around 2% for the whole year, so it’s good news to see housing prices slowing down,” Pierce said. .
These new data are the last published before the presidential elections, but also before the next meeting of the Federal Reserve (Fed).
The latter instead relies on variations in the PCE index to determine its monetary policy. This indicator will be released later this month.
In August, the increase in the PCE index had fallen to 2.2% year-on-year, coming very close to the medium-term target of 2% provided for by the Fed’s mandate, leading the central bank to lower its rates for the first time in mid-September.
“It should be even more moderate for September,” anticipated Michael Pierce, “it even seems reasonable to me to see the PCE index very close to 2%, the real surprise could come from a rise in underlying inflation “.
The Fed remains cautious in the evolution of its monetary policy, regularly emphasizing that it remains primarily based on the evolution of macroeconomic data.
Markets generally expect a 25 basis point cut at its next meeting, scheduled for November 6-7, then another of the same magnitude at the last meeting of the year, in mid-December, according to the CME monitoring tool, FedWatch.
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“The Slowdown of Inflation: A Breath of Fresh Air for the US Economy, But What Does it Mean for the Presidential Campaign?”
In a welcome development for the US economy, inflation has continued to slow down in September, albeit at a slower pace than expected. According to the latest CPI index released by the Labor Department, inflation has returned to 2.4% over one year, down from 2.5% in August. This news comes as a relief to Americans, who have been dealing with rising prices and a tightening wallet for months.
On the surface, this dip in inflation may seem like a minor victory for the US economy. However, when you dig deeper, the numbers tell a more nuanced story. Over one month, prices have increased by 0.2%, which is the same pace as the previous two months. This suggests that inflation is not slowing down as quickly as many had hoped.
Furthermore, analysts had expected a slightly larger drop in inflation, with a consensus of 2.3% increase in consumer prices over one year. This means that while inflation is still trending downward, it’s not quite meeting expectations.
So, what does this mean for the presidential campaign, which is now just weeks away from the vote on November 5? The issue of inflation has been a major talking point for both candidates, with each side presenting its own solutions for tackling the problem.
For one candidate, this latest data may be seen as a vindication of their economic policies, which have focused on controlling inflation through monetary policy. However, for the other candidate, this news may be a hurdle to overcome, as they have been criticized for their handling of the economy.
Ultimately, the slowing of inflation is a positive development for the US economy, but it’s far from a silver bullet. With the presidential campaign in full swing, both candidates will need to present a clear and compelling plan for tackling inflation and ensuring that the economy continues to grow.
while the slowdown of inflation is a welcome development, it’s just one piece of a much larger puzzle. As we head into the final stretch of the presidential campaign, one thing is clear: the issue of inflation will continue to be a major factor in shaping the conversation and influencing the outcome of the election.
Key Takeaways:
Inflation has slowed down in September, with a 2.4% increase over one year.
The drop in inflation is not as large as expected, with prices increasing by 0.2% over one month.
The presidential campaign will likely focus on the issue of inflation, with each candidate presenting their own solutions.
A clear and compelling plan for tackling inflation will be crucial for the winning candidate.
