US inflation has steadily cooled. Getting it down to the Fed’s target rate will be the toughest mile.
WASHINGTON — Over the past year, inflation in the United States has tumbled from 9% all the way to 3%, softening most of the price pressures that have gripped the nation for more than two years.Squeezing out the last bit of excess inflation and reducing it to the Federal Reserve’s 2% target rate is expected to be a much harder and slower grind.
At the same time, the Fed has acknowledged that inflation pressures have eased significantly over the past year. Encouragingly, that slowdown has occurred even while the economy has continued to expand and employers have steadily hired at a healthy pace. Another factor is that prices had soared in the first half of 2022 before slowing in the second half. So any increase in July would have the effect of boosting the year-over-year inflation rate.
Higher pay is one key issue driving strikes among Hollywood writers and actors. It was also a focus of the Teamsters union in its negotiations with UPS, which led to large pay gains. The United Auto Workers is also pushing for robust raises in its talks with U.S. automakers. “That trajectory tells us where things will go in the next 12 months,” said Skanda Amarnath, executive director of Employ America, an advocacy group.
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