US inflation returns to pre-pandemic levels and stands at 3%

The rate of inflation in the United States it fell one point in June, to 3%, reaching its lowest level since before the pandemic and thus completing a year followed by declines, according to the Bureau of Labor Statistics (BLS, for its acronym in English).

In monthly terms, consumer prices rose two tenths compared to the month of May.

US inflation has fallen for 12 consecutive months since, in June 2022, it broke its record for the last 40 years by standing at 9.1%.

The interest rate hikes approved since then by the Federal Reserve, as well as lower energy prices, have allowed the inflation rate in the United States to now stand at pre-pandemic levels and at its lowest rate in two years. .

Precisely, energy prices have fallen 16.7% in one year according to the BLSwhile food rose 5.7% in that time.

The annual rate of the inflation core, which measures the rise in prices without counting energy or food, stood at 4.8%.

In monthly terms, energy prices rose six tenths and food prices only one tenth. The underlying rise was only two tenths, the lowest since August 2021.

The significant drop in inflation will be one of the data to be taken into account by the Federal Reservewhich in two weeks begins a new meeting of its Open Market Committee to decide on interest rates.

Although rates were not raised at their previous meeting, Fed Chairman Jerome Powell warned that a further rate hike was expected this next time to prevent the economy from overheating.

Knowing the data of this Wednesday, it will be necessary to see if the Fed complies with this idea of ​​raising even the minimum, the rates, or leaves them in the current range, between 5% and 5.25%.

The labor market remains strong, and 209,000 net jobs were created in June, while the unemployment rate fell one tenth to 3.6%.

The president of the United States, Joe Biden, took advantage of this good news to place it among his economic achievements, among the results of what his government is calling “Bidenomics” already thinking about his messages for the 2024 presidential elections.

Biden said in a statement that the data is clear proof that inflation falls while the economy continues to be “strong” and with unemployment at historically low rates.

“Our progress creating jobs while lowering costs for families is not an accident, and I will continue to fight to keep those costs lower every day.”, said the US president.

Source: EFE