Prices accelerate the growth

As reported by the Ministry of labor, in July the consumer price index increased by 0.3% compared with June. Underlying inflation, i.e. excluding food and energy prices, also rose 0.3%, and it happened for two consecutive months, and the total increase during this period was the most significant more than 10 years.

Especially sharply more expensive energy (although it is true that in June prices have dropped), as well as medical services, public transportation and rental housing. And if ordinary consumers may be unhappy that they have to pay more, the Federal reserve probably breathed a sigh of relief, as too little inflation is also not responsible for the economy no good.

As experts believe, the role played by low unemployment, as well as the effect of customs duties on various imported goods. The price growth was 0.1% more than predicted, and, as suggested by Andrew hunter from Capital Economics, an event may serve as evidence that underlying inflationary pressures are more active than was previously assumed. Of it as added his colleague Michael Feroli from JPMorgan Chase, may be the fact that rose not only imports but also goods and services that depend on it.

However, it is not clear whether this trend, which has led to the fact that the fed, the consumer spending, which differs slightly from the consumer price index increased at an annual rate of 1.4% in June to a “target” for the regulator of the level of 2%.

Since this growth is a Testament to the revitalization of the national economy, in spite of its weakening on a global scale, nor on trade conflict the United States and China, it is possible that further reduction of interest rates, which has a stimulating effect, it is no longer necessary. While they were reduced by a quarter percentage point and are in the range from 2% to 2.25%. And if earlier the likelihood to reduce them even by half a point in the middle of September, when will be the next leadership conference the fed was, according to CME Group, and 15.4%, now equal to only 9.6%.
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