After months of worrying about gas prices rising and inflation rates reaching record highs, there’s finally some (tepid) sign of relief. On Aug. 10, two welcome announcements dropped: July’s inflation report shows that inflation has flattened month over month, and gas prices dropped to a level we haven’t seen in months. While there’s no reason to pop out the celebrations just yet, overall, things just got a little easier for families.
For months, inflation rates have soared across the U.S., driving price increases for everything from electricity to car purchases to milk. And with no projection on when the rise would slow, July’s figures bring some relief to families.
Inflation rates fell slightly to 8.5% year-over-year (YOY) in July, according to The Bureau of Labor Statistics' latest Consumer Price Index (CPI). The number has finally dropped following historic highs in the months prior, including June’s 9.1% inflation rate, per CNBC.
The welcome drop in overall inflation has been tied to gas prices, which have dropped for the 8th straight week in a row. The average price per gallon nationally is now below $4, a rate we haven’t seen since March, according to AAA.
Overall, gas prices are still up from this time last year, when the national cost was $3.18 a gallon, per USA Today. But it’s still a drop, and one that follows weeks of consistent price drops from the unaffordable highs we saw in June when the national average price per gallon was over $5.
Food prices, however, continue to climb. They rose another 1.1% in July, or a 10.9% inflation year-over-year, which is “the fastest pace since May 1979,” CNBC reports.
The price increase for food staples has proven to be challenging for families. It’s been hard to put food on the table, even with strategic budgeting tips in place because everything at the grocery store is more expensive.
- Eggs are 47% higher
- Milk and dairy products are 14.9% higher
- Butter is 26% higher
- Lunch meat is 24% higher
- Fruits and vegetables are 9.3% higher
- Bread and cereal are 15% higher
The cost of housing has also increased since last year by 5.7%, which accounts for one-third of the consumer price index, according to Yahoo! Finance. But, luckily, the publication also reports that statistics from the Labor Department’s jobs report for July “showed average hourly earnings increased 0.5% for the month and 5.2% on annual basis.”
Essentially, while inflation is flat this month, that doesn’t mean that nothing is increasing in price, especially when it comes to the cost of food and shelter. But with overall inflation rates flattening, and gas prices moving in the right direction, there is going to be some financial relief for families.
Whether or not it will last — or if prices will continue to drop and we’ve “turned a corner” on historic inflation — is another question altogether. "This is a step in the right direction but...we have many miles ahead of us before inflation normalizes. One month’s data point does not make a trend, however, so cautious optimism is likely the name of the game,” Mike Loewengart from E*Trade told Yahoo! Finance.