Former Economic Council chairman on infrastructure, spending, inflation worries
Former Council of Economic Advisers Chairman Kevin Hassett weighs in on how the infrastructure and spending bills will impact Americans’ wallets and daily lives.
U.S. consumer price gains remained hot as the economic recovery continued to take hold.
The Labor Department said Wednesday that consumer prices rose 5.4% year over year in July, matching the prior month's gain as the fastest since August 2008.
Prices increased 0.5% last month, slowing from June’s 0.9% increase. Analysts surveyed by Refinitiv were expecting a 0.5% gain.
Core prices, which exclude food and energy, rose 0.3% month over month and 4.3% annually. In June, core prices increased 0.9% and 4.5%, respectively.
CAR PART PRICES ARE HEADING HIGHER
"While the data should reassure markets that inflation isn’t on a relentless upward trend, make no mistake – this inflation report is still hot," said Seema Shah, chief strategist at Principal Global Investors.
Prices for shelter, food, energy and new vehicles all increased in July. The food index rose 0.7% while the energy index rose 1.6%, buoyed by a 2.4% gain in gasoline prices.
Used car prices rose 0.2% in July, far less than the 10.5% spike in June. In the last report, used car price gains accounted for more than one-third of the increase.
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The Federal Reserve has insisted the recent price gains are "transitory" and that those increases will mitigate once production issues are resolved.
Fed Chairman Jerome Powell has admitted that timing is uncertain.
"The Fed should consider this as yet more evidence of "substantial" progress towards their goals, and surely a deep-dive discussion into tapering will be on the top of their agenda at the September FOMC meeting," Shah said.
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