August 10, 2022: US inflation eased slightly in July, according to official data Wednesday, potentially taking pressure off the Federal Reserve to hike interest rates sharply while bringing a much-needed boost to President Joe Biden just months before crucial midterm elections.
With energy costs dropping in recent weeks, the consumer price index dipped to an annual rate of 8.5% last month, the Labor Department reported, lower than markets were projecting.
Fueled by aggressive consumer spending of pandemic savings, global supply chain snarls, domestic worker shortages and Russia's war on Ukraine, inflation soared 9.1% YoY in June, the highest in 40 years.
But the CPI was unchanged compared to June, a dramatic decline from the big increase in the prior month and defying expectations of a modest rise.
And when volatile food and energy prices are excluded from the calculation, the so-called core CPI rate rose just 0.3% — the smallest in four months, according to the report.
Soaring prices have continued to climb in the United States, squeezing family budgets and, by extension, Biden's popularity.
But the White House cheered the report.
"Our economy had zero percent inflation in July. ZERO PERCENT," White House economic spokeswoman Emilie Simons tweeted.
"No doubt there is more work to do, but we are on the right track," she added.