Inflation slowed in August in the United States, according to the PCE index, favored by the Fed which began to lower its rates, while high prices remain one of the main concerns of voters.
The increase in the inflation index fell in August to 2.2% year-on-year, compared to 2.5% in July, the Commerce Department announced on Friday.
Analysts were expecting 2.3% in August, according to the MarketWatch consensus.
The inflation that Americans have been facing for several years, and which has affected many other countries around the world, is one of the main concerns of voters, who will have to choose on November 5 between Democrat Kamala Harris and Republican Donald Trump .
However, so-called core inflation, which excludes volatile food and energy prices, rebounded to 2.7% year-on-year compared to 2.6% the previous month.
Over one month alone, inflation indices, both general and underlying, slowed to +0.1% compared to +0.2% in July, as expected.
The PCE index is the one favored by the American central bank (Fed), and whose progression it wants to reduce to 2% over one year, a level considered healthy for the economy.
Another inflation index, the CPI, on which pensions are indexed, saw its increase fall in August to its lowest level since February 2021, +2.5% over one year.
“Risks”
The slowdown in inflation convinced the Fed to begin, on September 18, to lower its rates, which had been at their highest level in more than 20 years since July 2023.
This monetary policy increased the cost of credit for households, and its easing should restore their purchasing power.
For this first rate cut since 2020, the Fed hit hard with a half-point cut, and its president, Jerome Powell, signaled that it was a “start”.
And, although the Fed is independent of political power, its decision was seen by the Trump camp as a boost to Joe Biden’s current vice-president, Kamala Harris.
The drastic cut in rates shows either “that the economy is in very bad shape” or that Fed officials are “playing the political game”, accused the former Republican president.
Kamala Harris hailed “good news for Americans”.
The Fed, while insisting that the job market is in good health, above all wants to prevent unemployment from rising too sharply.
Job creation slowed, but the unemployment rate fell slightly in August to 4.2%.
“All the indicators that we see in the labor market, in terms of inflation and growth, suggest that we are on the path to a soft landing”, that is to say a drop in the inflation that does not plunge the economy into the doldrums, Treasury Secretary Janet Yellen said Thursday.
“Of course, there are always risks,” she warned.
The next Fed meeting will take place on November 6 and 7, the day after the presidential election.
This article was automatically published. Sources: ats / awp / afp
