The Daily Money: Inflation edges higher as economists weigh odds of recession
It's Thursday, a big day if you've been keeping tabs on consumer prices. It's Brett Molina here with your roundup of Daily Money headlines.
Let's start with inflation. Consumer prices inched up 3.2% from a year earlier, up from 3% in June. While July's numbers ended a 12-month streak of slowing consumer price increases, inflation is far off the historic levels of June 2022, when it peaked at 9.1%.
What's falling? Prices for goods such as used cars have declined now that issues with the supply chain have been fixed.
What's rising? Rent. Annually, rent was up 8%, down from 8.3 the previous month. But there is some good news: Economists expect rent increases to ease. Meanwhile, costs for other services such as car repairs and auto insurance have surged.
So is this recession really happening?
For months, economists have discussed the strong possibility the U.S. could enter a recession. Now, more experts believe the economy could achieve a "soft landing," which means growth slows but we avoid a significant economic downturn.
According to a survey by Wolters Kluwer Blue Chip Economic Indicators, economists believe there’s a 50% chance of a recession in the next 12 months, down from 56% in July and 61% in May. Why the shift in optimism? They cite the economy's sturdy growth despite the Federal Reserve's historic run of interest rate hikes and cooling inflation.
Before you get excited, there are some forecasters who believe we're underestimating the impact of the Fed's interest rate hike campaign.
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About The Daily Money
Each weekday, The Daily Money delivers the best consumer news from Paste BN. We break down financial news and provide the TLDR version: how decisions by the Federal Reserve, government and companies impact you.