“Inflation is still too high. Prices are up 4.4 per cent since Trump took office, and paychecks aren’t keeping up,” she said in a statement.
Last week, fresh official data showed wage growth coming in at 3.2 per cent year-on-year, lagging inflation and meaning that most people were seeing their income shrink in real terms.
White House spokesperson Kush Desai, however, said the slowing inflation figures were “further proof that President Trump’s long-term agenda is delivering.”
“Despite temporary disruptions stemming from Iran, core CPI is near the Fed’s two-per cent target rate,” he said.
July’s price data offered some respite for households, with grocery prices dropping 0.1 per cent over the month, with three of the six major grocery food group indexes showing declines.
Analysts expect Wednesday’s data will give the US central bank room to breathe on the timing of potential rate hikes to curb inflation, with several Fed policymakers indicating the need for such a move.
“We expect the debate at the September FOMC meeting to be lively as the economy experiences a tight labor market while the inflation picture is quite blurry,” said Jeffrey Roach, chief economist for LPL Financial, referring to the Fed’s next rate-setting meeting.
Bill Adams, chief US economist at Fifth Third Commercial Bank, said July’s CPI data was “modestly better” and kept a “narrow path open for the Fed to hold rates steady in September.”
Oren Klachkin of Nationwide agreed, saying the data was exactly what “the market was hoping for.”
“It keeps the disinflation trend intact and so should lower the volume of the alarm bells at the Fed and allow policymakers to keep interest rates steady in September – contingent on the August CPI and employment reports.”
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