The Week in Business: Inflation Moderates

What’s Up? (Aug. 7-13)Prices Cool a Bit

After months of prices that climbed higher and higher without any indication of letting up, last month brought some relief. New inflation data on Wednesday showed the Consumer Price Index rising 8.5 percent in the year through July, a notable slowdown from June, when prices increased 9.1 percent. Falling prices for airfares, used cars, hotel rooms and gas drove the decline, with the national average for a gallon of gasoline descending sharply since earlier in the summer. But the inflation report is not the unqualified good news it may seem at first. A measure that strips out volatile food and fuel costs rose 5.9 percent, suggesting that underlying inflationary pressures remain strong. Still, the overall moderating pace is likely to be reassuring for policymakers at the Federal Reserve, who will see July’s data as a step in the right direction. And it’s a win for President Biden, for whom high inflation is a political liability. What…

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This article was written by Marie Solis and originally published on www.nytimes.com