US Inflation Eases as Energy Costs Decline
US inflation has been a subject of concern for policymakers and experts alike. According to TD Economics, CPI inflation fell from its four-year high of 4.2% in May to 3.4% in July. The easing of price pressures is largely attributed to declining energy costs.
The decline in energy prices has shaved off nearly three-quarters of a percentage point from CPI and accounts for about 85% of the two-month deceleration. However, oil prices have rebounded since then, suggesting that energy will provide limited disinflationary relief to headline CPI in the coming months.
Airfares are another category showing a notable impact, rising 7-11% since February, but it's difficult to separate fuel passthrough from other factors. Businesses seem to have treated the initial oil-price spike as temporary and have not passed on higher costs to consumers yet.