The personal consumption price index fell in July but the core index which excludes food and energy rose. The measure of inflation understates price pressures in the economy and benchmarks lower living standards inflicted on consumers .
In a forceful reminder delivered in a sobering tone, Fed Chairman stressed that lowering inflation may take longer and will inflict short-term pain to the economy.
Existing home sales declined for the sixth month in a row as mortgage rates and home prices stay elevated. Home sale time dropped to a record low 14 days.
Fed policymakers remarked that the recent decline in oil and commodities prices could not be relied upon for lower inflation as these volatile prices could easily rebound.
The labor market returned to its pre-pandemic level with the payrolls expanding by 528,000 in July and unemployment rate dipping to a five-decade low of 3.5%.
Americans are driving less than during the pandemic after gasoline prices soared above $5 a gallon across the nation. With the surging shale oil production and lack of new demand, oil prices are likely to continue to decline for a while.
The U.S. GDP shrank for the second quarter in a row but the annual pace of decline slowed. An uptick in exports were offset by the larger declines in inventory investments, government spending, and personal consumption.
