Slowing inflation has provided some relief to families preparing for the back-to-school season, according to recent data from the Bureau of Labor Statistics. The consumer price index (CPI) on all items increased by 2.7% for the 12 months ending in July, which is unchanged from June.
Energy prices continued their decline, falling an additional 1.6% in July after a 0.8% drop in June. Gasoline prices also decreased significantly, dropping by 9.5% in July following an 8.3% reduction in June. Food prices rose by 2.9% in July, slightly down from 3.0% in June, and grocery prices increased by 2.2%, compared to a previous rise of 2.4%.
Core inflation, which excludes energy and food prices due to their volatility, saw an increase at a pace of 3.1% in July after rising by 2.9% in June.
Real average weekly wages went up by 1.4%.
The annualized inflation rate during President Trump’s second term stands at 1.4%. This is less than half the rate seen during former President Biden’s last 30 months (3.1%) and significantly lower than the rate during Biden’s first 18 months (8.6%).
Patrice Onwuka, director for the Center for Economic Opportunity at Independent Women, commented on these trends:
“Inflation is coming down, especially for the categories that affect American families most. As families shop for the back-to-school season, clothing prices for boys (1.9%) and girls (-1.9%) are slowing or falling as apparel prices continue to trend down. Prices on educational materials and supplies are slowing, and prices on phones and calculators (-8.8%) are falling. Computer prices have slowed from almost 5% to just 1% in just one month.
“All Americans are getting consistent price relief at the grocery store as prices slowed to 2.2% from 2.4% and at the gas pump as gasoline prices have fallen almost 10%. Although shelter, the biggest driver of the inflation rate, remains a big headache for people, shelter prices slowed in July from June, signaling that stubborn high rents are coming down and housing is growing a bit more affordable.
“The tariff effect has yet to materialize across the economy despite the widespread fears that it would tank the economy. American businesses now have greater clarity about the tariffs, along with certainty that their taxes will be lowered and regulations will be eliminated. The pro-growth Trump agenda is making good on the promise to spur production and innovation in the American economy and delivering lower prices.”
